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Darren Dahl (Editor in Chief)Eileen FischerGita JoharVicki Morwitz

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Choosing Outcomes versus Choosing Products: Consumer-Focused Retirement Investment Advice

Daniel G. Goldstein, Eric J. Johnson, William F. Sharpe
DOI: http://dx.doi.org/10.1086/589562 440-456 First published online: 1 October 2008

Abstract

Investing for retirement is one of the most consequential yet daunting decisions consumers face. We present a way to both aid and understand consumers as they construct preferences for retirement income. The method enables consumers to build desired probability distributions of wealth constrained by market forces and the amount invested. We collect desired wealth distributions from a sample of working adults, provide evidence of the technique's reliability and predictive validity, characterize individual- and cluster-level differences, and estimate parameters of risk aversion and loss aversion. We discuss how such an interactive method might help people construct more informed preferences.

  • Behavioral Decision Theory
  • Consumer Information/Education
  • Consumer Welfare/Quality of Life
  • Perceived Risk
  • Preferences
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