When it comes to estimating the benefits of long-term savings, many people rely on their intuition. Focusing on the domain of retirement savings, we use a randomized experiment to explore people’s intuition about how money accumulates over time. We ask half of our sample to estimate future...

This paper develops a new life cycle model that aims to describe the savings and asset allocation choices of boundedly rational agents. In this model, agents make forward-looking decisions without the requirement of anticipating their actual future decisions. Instead, agents pursue two simple...

This paper develops a new life cycle model that aims to describe the savings and asset allocation decisions of boundedly rational agents. The paper’s main theoretical contribution is the provision of a simple, tractable and parsimonious framework within which agents make forward looking...

We investigate the relationship between subjective probabilities of future stock market returns and decisions about stockholding. Specifically, we examine whether acting upon subjective probabilities is confined to individuals with high cognitive skills. We explore this question using data from...