We develop an equilibrium theory of employer-sponsored retirement plan design using a behavioral contract theory approach. The operation of the labor market results in retirement plans that generally cater to, rather than correct, workers' mistakes. Our theory provides new explanations for a...

This Essay is a brief response to the stimulating essays on cost-benefit analysis of financial regulation by Professors Coates and Cox in this volume. Both Coates and Cox largely agree that we want policy decisions about financial regulation to be made using what Coates refers to as...