The 2004 JPE paper "Save more tomorrow" by Thaler and Benartzi is one of the most famous papers in behavioural economics and behavioural finance. Drawing on the principle of myopic loss aversion, they designed a pension scheme whereby people enrolled but contributions did not start until first pay increase. This increased substantially the savings rate and the paper has been replicated in many contexts and is a very famous application of behavioural economics research.
Benartzi gives a fascinating TED talk on this paper but also more generally on behavioural finance and the role of behavioural economics in facilitating more rational saving and investment patterns.
1 comment:
Little bit off-topic here Liam but I think we've been mis-pronouncing "Thaler" all these years.
Heard a professor here mention receiving an email "from Richard Thay-ler." (As in rhymes with Taylor.)
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