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Choosing Outcomes Versus Choosing Products: Consumer-Focused Retirement Investment Advice

17 Pages Posted: 18 Jun 2009  

Daniel G. Goldstein

Microsoft Research New York City; London Business School

Eric J. Johnson

Columbia Business School - Marketing

William F. Sharpe

Stanford University - Graduate School of Business

Date Written: 2008

Abstract

Investing for retirement is one of the most consequential yet daunting decisions consumers face. We present a way to both aid and understand consumers as they construct preferences for retirement income. The method enables consumers to build desired probability distributions of wealth constrained by market forces and the amount invested. We collect desired wealth distributions from a sample of working adults, provide evidence of the technique's reliability and predictive validity, characterize individual- and cluster-level differences, and estimate parameters of risk aversion and loss aversion. We discuss how such an interactive method might help people construct more informed preferences.

Suggested Citation

Goldstein, Daniel G. and Johnson, Eric J. and Sharpe, William F., Choosing Outcomes Versus Choosing Products: Consumer-Focused Retirement Investment Advice (2008). Journal of Consumer Research, Vol. 35, pp. 440-456. Available at SSRN: https://ssrn.com/abstract=1420351

Daniel G. Goldstein (Contact Author)

Microsoft Research New York City ( email )

641 Avenue of Americas
New York, NY 10011
United States

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
+44 0 20 7000 8611 (Phone)
+44 0 20 7000 8601 (Fax)

HOME PAGE: http://www.dangoldstein.com

Eric J. Johnson

Columbia Business School - Marketing ( email )

New York, NY 10027
United States

William F. Sharpe

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-725-4876 (Phone)
650-725-7979 (Fax)

HOME PAGE: http://www.wsharpe.com

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