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Jurnal

JMR : JOURNAL OF MARKETING RESEARCH

Keyword

retirement savings, behavioral finance, bias, cognitive errors, financial decision making

Pengarang

  1. Craig R.M. McKenzie
  2. Michael J. Liersch

    Subject

    MARKETING

    [Abstrak]

    People systematically underestimate
    exponential growth. This article illustrates this phenomenon, its implications,
    and some potential interventions in the context of saving for retirement, where
    savings grow exponentially over long periods of time. Experiment 1 shows that a
    majority of participants expect savings over 40 years to grow linearly rather
    than exponentially, leading them to grossly underestimate their account balance
    at retirement. Experiment 2 demonstrates that this mis understanding leads to
    underestimates of the cost of waiting to save, which makes putting off saving
    more attractive than it should be. Finally, experiments 3 – 5 show that
    highlighting the exponential growth of savings motivates both college students
    and employees to save more for retirement. Making clear to amployees the
    exponential growth of savings before they make crucial decisions about how much
    to save may be a simple and effective means of increasing retirement savings.

    Periode

    Vol 48, Nomor SPE, Tahun 2011

    [Berkas]

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