Playing with your Future: Who Gambles in Defined-Contribution Pension Plans?

41 Pages Posted: 15 Aug 2015 Last revised: 15 May 2018

See all articles by Gordon L. Clark

Gordon L. Clark

Oxford University - Smith School of Enterprise and the Environment

Maurizio Fiaschetti

University of Nottingham

Peter Tufano

University of Oxford - Said Business School; National Bureau of Economic Research (NBER); University of Oxford - Said Business School

Michael Viehs

Oxford University Smith School of Enterprise and the Environment; European Centre for Corporate Engagement (ECCE)

Date Written: January 5, 2018

Abstract

In this article, we investigate the relationship between volatility in the stock market and the trading behaviour of employees in defined-contribution (DC) pension schemes. We found that 10 percent of our sample exhibited compulsive gambling behaviour; in other words, they both ‘fed’ and ‘fed-off’ volatility, and that their individual attributes such as gender, experience in the firm and age clearly influenced their trading behaviour. Our findings shed new light on the behavioural drivers of financial decision-making in a saving-for-retirement setting, and on the crucial importance of the need for the financial industry and policymakers to address the growing onus put on ill-equipped non-professional financial decision makers.

Keywords: Volatility, Retail Investors, Effect of Experience, Financial Decision-Making, Retirement

JEL Classification: G12, G41, J26, C38

Suggested Citation

Clark, Gordon L. and Fiaschetti, Maurizio and Tufano, Peter and Viehs, Michael, Playing with your Future: Who Gambles in Defined-Contribution Pension Plans? (January 5, 2018). Available at SSRN: https://ssrn.com/abstract=2643616 or http://dx.doi.org/10.2139/ssrn.2643616

Gordon L. Clark

Oxford University - Smith School of Enterprise and the Environment ( email )

South Parks Road
Oxford, OX1 3QY
United Kingdom
+44 1865 285197 (Phone)
+44 1865 285073 (Fax)

HOME PAGE: http://www.geog.ox.ac.uk/staff/glclark.html

Maurizio Fiaschetti (Contact Author)

University of Nottingham ( email )

Business School North
Wollaton Road
Nottingham, NG81BB
United Kingdom
+44 (0) 115 8467420 (Phone)

Peter Tufano

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0) 1865 288551 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0) 1865 288551 (Phone)

Michael Viehs

Oxford University Smith School of Enterprise and the Environment ( email )

South Parks Road
Oxford, OX1 3QY
United Kingdom
+44-1865-614938 (Phone)

European Centre for Corporate Engagement (ECCE) ( email )

Tongersestraat 53
Maastricht, 6211LM
Netherlands

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