Citation

Discussion Paper Details

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Full Details

Title: Getting to the Top of Mind: How Reminders Increase Saving

Author(s): Dean S. Karlan, Margaret McConnell, Sendhil Mullainathan and Jonathan Zinman

Publication Date: June 2010

Keyword(s): attention, Intertemporal Consumer Choice and savings

Programme Area(s): Development Economics

Abstract: We develop and test a simple model of limited attention in intertemporal choice. The model posits that individuals fully attend to consumption in all periods but fail to attend to some future lumpy expenditure opportunities. This asymmetry generates some predictions that overlap with models of present-bias. Our model also generates the unique predictions that reminders may increase saving, and that reminders will be more effective when they increase the salience of a specific expenditure. We find support for these predictions in three field experiments that randomly assign reminders to new savings account holders.

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Bibliographic Reference

Karlan, D, McConnell, M, Mullainathan, S and Zinman, J. 2010. 'Getting to the Top of Mind: How Reminders Increase Saving'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7907