Getting to the Top of Mind: How Reminders Increase Saving
by Dean Karlan, Margaret McConnell, Sendhil Mullainathan, Jonathan Zinman - #16205 (AG)
Abstract:
We develop and test a simple model of limited attention in
intertemporal choice. The model posits that individuals fully attend
to consumption in all periods but fail to attend to some future lumpy
expenditure opportunities. This asymmetry generates some predictions
that overlap with models of present-bias. Our model also generates
the unique predictions that reminders may increase saving, and that
reminders will be more effective when they increase the salience of a
specific expenditure. We find support for these predictions in three
field experiments that randomly assign reminders to new savings
account holders.
http://papers.nber.org/papers/
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