Abstract

http://ssrn.com/abstract=1426459
 
 

References (22)



 
 

Citations (5)



 


 



Default, Framing and Spillover Effects: the Case of Lifecycle Funds in 401(K) Plans


Olivia S. Mitchell


University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)

Gary R. Mottola


FINRA

Stephen P. Utkus


The Vanguard Group, Inc. - Center for Retirement Research

Takeshi Yamaguchi


University of Pennsylvania - The Wharton School

June 2009

NBER Working Paper No. w15108

Abstract:     
Important behavioral factors such as default and framing effects are increasingly being employed to optimize decision-making in a variety of settings, including individually-directed retirement plans. Yet such approaches may have unintended “spillover” effects, as we show with regard to the introduction of lifecycle funds in U.S. 401(k) plans. As anticipated, lifecycle funds do reshape individual portfolio choices through large default and framing effects. But unexpectedly, they also create a new class of investors which holds these funds as part of more complex portfolios. Our results are directly relevant to those interested in retirement plan design and retirement security; they also highlight the importance of assessing such spillover effects in other consequential settings where behavioral economics techniques may be employed.

Number of Pages in PDF File: 33

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Date posted: June 30, 2009  

Suggested Citation

Mitchell, Olivia S. and Mottola, Gary R. and Utkus, Stephen P. and Yamaguchi, Takeshi, Default, Framing and Spillover Effects: the Case of Lifecycle Funds in 401(K) Plans (June 2009). NBER Working Paper No. w15108. Available at SSRN: http://ssrn.com/abstract=1426459

Contact Information

Olivia S. Mitchell (Contact Author)
University of Pennsylvania - The Wharton School ( email )
Philadelphia, PA 19104-6365
United States

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Gary R. Mottola
FINRA ( email )
1735 K Street NW
Washington DC, DC 20006
United States
HOME PAGE: http://www.finra.org
Stephen P. Utkus
The Vanguard Group, Inc. - Center for Retirement Research ( email )
100 Vanguard Boulevard, M38
Malvern, PA 19355
United States
610-669-6308 (Phone)
Takeshi Yamaguchi
University of Pennsylvania - The Wharton School ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States
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References:  22
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