FAIR is proud to announce the publication of a research paper in the Journal of Banking and Finance. Led by affiliated PhD researchers Andre Lot and Xiaogeng Xu, along with Kremena Bachmann and Thorsten Hens, the study sheds light on the intricate world of retirement decision-making. By conducting experimental studies and replications, the team has uncovered crucial insights into the factors that influence individuals' choices when planning for their golden years.

Retirement decisions encompass various complexities and hold significant implications for individuals, families, and society. To unravel the intricacies of this domain, FAIR researchers adapted the design of four experimental studies and replicated them with a larger online sample from the broader population.

Abstract

We adapt the design of four experimental studies on retirement decision-making and conduct replications with a larger online sample from the broader population. We replicate most of the main effects of the original studies. In particular, we confirm that consumption decisions are less efficient when subjects need to borrow from the future than when they need to save from the present. When subjects collect retirement benefits as lump sum instead of annuities, they choose to retire later, as suggested by the original study. We also confirm that savings are higher when they are incentivized with matching contributions than when incentivized with tax rebates. However, when faced with varying survival risks, subjects in our replication make only partial adjustments to spending paths when ambiguity is reduced. We also propose a further experimental research agenda in related topics and discuss practical issues on subject recruitment, attrition, and redesign of complex tasks.

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