Complexity and asset legitimacy in retirement investment

Tse, Alan, Friesen, Lana and Kalayci, Kenan (2016) Complexity and asset legitimacy in retirement investment. Journal of Behavioral and Experimental Economics, 60 35-48. doi:10.1016/j.socec.2015.12.001

Author Tse, Alan
Friesen, Lana
Kalayci, Kenan
Title Complexity and asset legitimacy in retirement investment
Journal name Journal of Behavioral and Experimental Economics   Check publisher's open access policy
ISSN 2214-8043
Publication date 2016-02-01
Year available 2016
Sub-type Article (original research)
DOI 10.1016/j.socec.2015.12.001
Open Access Status Not Open Access
Volume 60
Start page 35
End page 48
Total pages 14
Place of publication Amsterdam, Netherlands
Publisher Elsevier
Language eng
Subject 2002 Economics and Econometrics
3202 Applied Psychology
3300 Social Sciences
Abstract Despite their importance, many individuals do not actively manage their retirement investment accounts. We use a laboratory experiment to examine the role that complexity plays in retirement investment decisions. We find that complex fee structures significantly increase both decision errors and default option choices compared with simple fees. We also find evidence of myopic risk aversion while complexity has no effect on the risk profile of investment decisions. The complexity effect is robust to increased asset legitimacy by having subjects earn the investment money in the experiment, although earning the investment money leads to faster learning.
Keyword Complexity
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: HERDC Pre-Audit
School of Economics Publications
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Created: Fri, 22 Jan 2016, 21:25:02 EST by Kenan Kalayci on behalf of School of Economics