Stacking of choices

The way choices are presented influences the choices people make. For example, people make different decisions when a series of choices are presented together or separately (Sunstein, 2018). Overseeing the consequences of a series of choices is particularly important in savings and investment decisions, because the consequences of different decisions are cumulative (e.g. how much you want to save, depends on what you’ve already saved) and are related (e.g. spreading risk). It therefore seems better to present choices together. However, this can cause the choice situation to become very complex, which in turn can lead to worse decisions (Kalaycı & Serra-Garcia, 2016).

Dutch pension scheme members are getting more and more options. For example, there are several decisions that lead to a (possibly) higher pension benefit in the short term, at the expense of a lower benefit in the long term: a lump sum at retirement, high-low pension, and the choice for a fixed or variable pension (sometimes with planned decline). At this moment, these choices are presented at different times. The consequences of this for people’s decisions are unknown. People who bear responsibility for their own pension, for example the growing group of self-employed persons, have many more options, the consequences of which cumulate. Since the way in which choices are presented influences the decisions that will be made, providers of (financial) products can use the choice architecture to help clients. However, the interests of the provider are not always the same as those of the client. As a result, there is a risk that people are manipulated towards sub-optimal choices. We therefore also investigate whether people are able and / or willing to use this form of manipulation to influence the choices of others. Finally, we look at people’s moral judgment about this form of manipulation.

Research questions

1) How do people’s willingness to take risks and intertemporal considerations depend on:

  1. Presenting choices separately or together
  2. In the case of separate choices, the order in which they are presented
  3. A decision aid to oversee the combined consequences of choices

2) Are people able and willing to manipulate the choices of others?

3) What are people’s moral judgments about this form of manipulation?

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.


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