Financial Incentives Beat Social Norms: A Field Experiment on Retirement Information Search

60 Pages Posted: 24 Aug 2017 Last revised: 12 Feb 2018

Rob Bauer

Maastricht University

Inka Eberhardt

Maastricht University

Paul Smeets

Maastricht University

Date Written: August 22, 2017

Abstract

A lack of pension knowledge undermines adequate savings decisions. To understand what motivates individuals to inform themselves about their pension situation, we conducted a field experiment with 245,712 pension fund participants. We find that a small financial incentive is cost-effective and increases the rate at which individuals visit their personal pension website by 52%. Our experiment directly compares the effect of financial incentives to different social norms, which turn out to be ineffective in the pension domain. Financial incentives are effective regardless of gender, age and income, while nudges are ineffective for each subgroup.

Keywords: Retirement Information Search, Field Experiment; Social Norms, Financial Incentives

JEL Classification: C93, D83

Suggested Citation

Bauer, Rob and Eberhardt, Inka and Smeets, Paul, Financial Incentives Beat Social Norms: A Field Experiment on Retirement Information Search (August 22, 2017). Available at SSRN: https://ssrn.com/abstract=3023943 or http://dx.doi.org/10.2139/ssrn.3023943

Rob Bauer

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 43 3883871 (Phone)

Inka Eberhardt (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Paul Smeets

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands
+31433883643 (Phone)

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