Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/210415 
Authors: 
Year of Publication: 
2018
Series/Report no.: 
Working Paper No. 858
Publisher: 
Queen Mary University of London, School of Economics and Finance, London
Abstract: 
This paper analyses a model in which employees are biased in their perception of their optimal contribution rates or asset allocations in defined contribution pension plans. The optimal default is characterised as a function of the parameters. It is shown that, for some values of the parameters, forcing employees to actively decide is the optimal default policy. The total loss in the population at the optimal default policy can be nonmonotone in the parameters in counterintuitive ways.
Subjects: 
optimal defaults
libertarian paternalism
nudging
pension plan design
JEL: 
D14
D91
J26
J32
Document Type: 
Working Paper

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