Decision-Making Approaches and the Propensity to Default: Evidence and Implications / Jeffrey R. Brown, Anne M. Farrell, Scott J. Weisbenner.

Format:

Book

Author/Creator:

Brown, Jeffrey R.

Contributor:

National Bureau of Economic Research.

Farrell, Anne M.

Weisbenner, Scott J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20949.

NBER working paper series no. w20949

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Decision-Making Approaches and the Propensity to Default

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

This paper examines heterogeneity in the responsiveness to default options in a large state retirement plan, focusing on individuals' decision-making approaches as well as their economic and demographic characteristics. Using a survey of plan participants, we find that procrastination and the need for cognitive closure are important determinants of the likelihood of default. We also explore an important implication of defaulting - individuals who default are significantly more likely to subsequently express a desire to enroll in a different plan. The desire to change plans is also correlated with numerous economic and decision-making characteristics, including procrastination.

Notes:

Print version record

February 2015.