Article: 401(K) Retirement Plan Contribution Decision Factors: The Role of Social Norms Journal: Journal of Business and Management (JBM) 2004 Vol.9 No.4 pp.327 - 344 Abstract: To improve our understanding of retirement investment decision-making, several researchers have begun to look beyond plan characteristics and demographic data to investigate behavioral and social influences on such decisions. This paper reports the findings of a study on the effects of descriptive and injunctive social norms on 401(k) contribution decisions in an experimental situation. Results show that both descriptive and injunctive social norms have strong effects on contribution decisions. Thus, the type and presentation of information provided to individuals influenced their retirement plan contribution decisions. We find a strong tendency for people to anchor to contribution levels that are multiples of five percent. We also find a strong gender effect, with men contributing significantly more than women. We discuss the implications and suggest directions for future research. Inderscience Publishers - linking academia, business and industry through research

Title: 401(K) Retirement Plan Contribution Decision Factors: The Role of Social Norms

Authors: Jeffrey J. Bailey; John R. Nofsinger; Michele O'Neill

Addresses: Author address listing can be found in the "About the Authors" section at the end of the article.

Abstract: To improve our understanding of retirement investment decision-making, several researchers have begun to look beyond plan characteristics and demographic data to investigate behavioral and social influences on such decisions. This paper reports the findings of a study on the effects of descriptive and injunctive social norms on 401(k) contribution decisions in an experimental situation. Results show that both descriptive and injunctive social norms have strong effects on contribution decisions. Thus, the type and presentation of information provided to individuals influenced their retirement plan contribution decisions. We find a strong tendency for people to anchor to contribution levels that are multiples of five percent. We also find a strong gender effect, with men contributing significantly more than women. We discuss the implications and suggest directions for future research.

Keywords: Social norms; contribution decisions; retirement plan; gender effect; behavioral influences.

DOI: 10.1504/JBM.2004.141115

Journal of Business and Management, 2004 Vol.9 No.4, pp.327 - 344

Published online: 05 Sep 2024 *

Title: 401(K) Retirement Plan Contribution Decision Factors: The Role of Social Norms

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