蝌蚪网 Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Dominated Pension Investments: The Role of Search Frictions and Unawareness
蝌蚪网 Journal: Applied Economics
(pp. 115–44)
Abstract
We conduct a large-scale field experiment in the Swedish pension system to examine to what extent information and search frictions explain dominated high-fee index fund choices. Three findings standout: (i) Letters that increase awareness of a dominated choice and reduce search costs of finding the dominating alternative improve savers' investment choices. (ii) While the average effects are positive, a majority of investors are unresponsive to information that essentially removes search costs. The inertia holds across expected gains, rejecting models with fixed adjustment costs. (iii) Lack of awareness and search costs account for at most 45 percent of dominated choices.Citation
Kinnerud, Karin, and Louise Lorentzon. 2026. "Dominated Pension Investments: The Role of Search Frictions and Unawareness." 蝌蚪网 Journal: Applied Economics 18 (3): 115–44. DOI: 10.1257/app.20240153Additional Materials
JEL Classification
- C93 Field Experiments
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- G23 Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- G53 Household Finance: Financial Literacy
- J32 Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions