Playing with your Future: Who Gambles in Defined-Contribution Pension Plans?

Clark, Gordon L.; Fiaschetti, Maurizio; Tufano, Peter; Viehs, Michael

Abstract

In this article, we investigate the relationship between volatility in the stock market and the trading behaviour of employees in defined-contribution (DC) pension schemes. We found that 10 per cent of our sample exhibited compulsive gambling behaviour; in other words, they both ‘fed’ and ‘fed-off’ volatility, and that their individual attributes such as gender, experience in the firm and age clearly influenced their trading behaviour. Our findings shed new light on the behavioural drivers of financial decision-making in a saving-for-retirement setting, and on the crucial importance of the need for the financial industry and policy makers to address the growing onus put on ill-equipped non-professional financial decision makers.
JEL Codes. G12, G41, J26, C38

Citation

Clark, G. L., Fiaschetti, M., Tufano, P., & Viehs, M. (2018). Playing with your Future: Who Gambles in Defined-Contribution Pension Plans?. International Review of Financial Analysis, 60, 213-225. https://doi.org/10.1016/j.irfa.2018.09.007

• Journal Article Type: Article
• Acceptance Date: Sep 10, 2018
• Online Publication Date: Sep 13, 2018
• Publication Date: Nov 1, 2018
• Deposit Date: Sep 18, 2018
• Publicly Available Date: Sep 18, 2018
• Journal: International Review of Financial Analysis
• Print ISSN: 1057-5219
• Electronic ISSN: 1873-8079
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 60
• Pages: 213-225
• DOI: https://doi.org/10.1016/j.irfa.2018.09.007
• Keywords: VOLATILITY, RETAIL INVESTORS, EFFECT OF EXPERIENCE, FINANCIAL DECISION-MAKING, RETIREMENT
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