Decision Making in the Pension Fund Board Room: An Experiment with Dutch Pension Fund Trustees

CentER Discussion Paper Series No. 2010-18

39 Pages Posted: 4 Mar 2010

See all articles by Hendrik P. van Dalen

Hendrik P. van Dalen

Tilburg University, CentER; Netherlands Interdisciplinary Demographic Institute (NIDI)

Kene Henkens

Netherlands Interdisciplinary Demographic Institute

Kees C. G. Koedijk

Tilburg University - Department of Finance

Alfred Slager

Tilburg University - TIAS School for Business and Society

Date Written: February 25, 2010

Abstract

We ask how pension fund trustees deal with the booms and busts that funds encounter, and to what extent the decisions of pension fund trustees are affected by behavioral biases. We examine these issues by using a vignette-method field experiment among Dutch pension fund trustees. We find that trustees display choices that accord with the phenomenon of loss aversion and that trustees allow their choices to be affected by the forces of social comparison: the reserve position of their fund compared to the position of other funds has a significant influence in choosing a pension fund policy mix.

Keywords: pension funds, finance, governance, behavioral economics

JEL Classification: D7, G23, G11

Suggested Citation

van Dalen, Hendrik P. and Henkens, Kene and Koedijk, Kees G. and Slager, Alfred, Decision Making in the Pension Fund Board Room: An Experiment with Dutch Pension Fund Trustees (February 25, 2010). CentER Discussion Paper Series No. 2010-18. Available at SSRN: https://ssrn.com/abstract=1562681 or http://dx.doi.org/10.2139/ssrn.1562681

Hendrik P. Van Dalen (Contact Author)

Tilburg University, CentER ( email )

Tilburg University
P.O. Box 90153
Tilburg, NL-5000 LE
Netherlands
+13 4668982 (Phone)

HOME PAGE: http://www.tilburguniversity.nl/webwijs/show/?uid=h.p.vandalen

Netherlands Interdisciplinary Demographic Institute (NIDI) ( email )

P.O. Box 11650
NL-2502 AR The Hague
Netherlands
+70 356 5237 (Phone)
+70 364 7187 (Fax)

HOME PAGE: http://www.nidi.knaw.nl/en/staff/vandalen/

Kene Henkens

Netherlands Interdisciplinary Demographic Institute ( email )

P.O. Box 11650
The Hague NL-2502 AR
Netherlands
+3170 3565235 (Phone)
+3170 3647187 (Fax)

Kees G. Koedijk

Tilburg University - Department of Finance ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 4663048 (Phone)
+31 13 4662052 (Fax)

Alfred Slager

Tilburg University - TIAS School for Business and Society ( email )

Warandelaan 2
TIAS Building
Tilburg, Noord Brabant 5037 AB
Netherlands

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