5 research outputs found
Choice Architecture to Improve Financial Decision Making
This is the author accepted manuscript. The final version is available from MIT Press via the DOI in this recordWe exploit the principles of choice architecture to evaluate interventions in the
market for reloadable prepaid cards. Participants are randomized into three card
menu presentation treatments - the market status quo, a regulation-inspired reform, or an enhanced reform designed to minimize attribute overload - and offered choices based on prior structural estimation of individual preferences. Consumers routinely choose incorrectly under the status quo, with tentative evidence
the regulation-inspired presentation may increase best card choice, and clear evidence the enhanced reform reduces worst card choice. Welfare analysis suggests
the regulation-inspired presentation offers modest gains, while the enhanced policy
generates substantial benefits