Experimental Research on Retirement Decision-Making: Evidence from Reproductions

53 Pages Posted: 13 Sep 2022

See all articles by Kremena Bachmann

Kremena Bachmann

University of Zurich - Department of Banking and Finance; Zurich University of Applied Sciences

Andre Lot

NHH - Norwegian School of Economics; Zurich University of Applied Sciences

Xiaogeng Xu

Hanken School of Economics; Helsinki Graduate School of Economics; FAIR NHH

Thorsten Hens

University of Zurich - Department of Banking and Finance; Norwegian School of Economics and Business Administration (NHH); Swiss Finance Institute

Multiple version iconThere are 2 versions of this paper

Date Written: September 12, 2022

Abstract

We adapt the design of five experimental studies on retirement decision-making and conduct reproductions with a larger sample from the broader population. We reproduce most of the main effects of the original studies. In particular, we find that consumption decisions are less efficient when subjects need to borrow from the future than save from the present. When subjects collect retirement benefits as lump-sum instead of annuities, they choose to retire later. The duration of retirement affects the saving behavior of the subjects. Savings are higher when they are incentivized with matching contributions than with tax rebates. When faced with stochastic survival risk, subjects make partial adjustments to spending paths. We also propose a further experimental research agenda in related topics and discuss practical issues on subject recruitment, attrition, and redesign of complex tasks.

Keywords: household finance; retirement decision; savings; annuities; life-cycle optimization; income smoothing; experiments; reproductions

JEL Classification: C91, D15, G51, J26

Suggested Citation

Bachmann, Kremena and Lot, Andre and Xu, Xiaogeng and Hens, Thorsten, Experimental Research on Retirement Decision-Making: Evidence from Reproductions (September 12, 2022). Swiss Finance Institute Research Paper No. 22-72, Available at SSRN: https://ssrn.com/abstract=4217816 or http://dx.doi.org/10.2139/ssrn.4217816

Kremena Bachmann

University of Zurich - Department of Banking and Finance ( email )

Plattenstrasse 32
CH-8032 Zurich, Zurich 8032
Switzerland

Zurich University of Applied Sciences ( email )

Institut fuer Angewandte Medienwissenschaft
Zur Kesselschmiede 35
Winterthur, CH 8401
Switzerland

Andre Lot

NHH - Norwegian School of Economics ( email )

Helleveien 30
Bergen, NO-5045
Norway

Zurich University of Applied Sciences ( email )

Technikumstrasse 9
Winterthur, Zurich 8401
Switzerland

Xiaogeng Xu

Hanken School of Economics ( email )

Arkadiankatu 7
Helsinki, 00101
Finland

Helsinki Graduate School of Economics ( email )

Arkadiankatu 7
Helsinki, 00101
Finland

FAIR NHH

Helleveien 30
N-5035 Bergen
Norway

Thorsten Hens (Contact Author)

University of Zurich - Department of Banking and Finance ( email )

Plattenstrasse 32
Zurich, 8032
Switzerland
+41-44 634 37 06 (Phone)

Norwegian School of Economics and Business Administration (NHH)

Helleveien 30
Bergen, 5045
Norway

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

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