Chapter

Introduction

Gordon L. Clark, Kendra Strauss and Janelle Knox-Hayes

in Saving for Retirement

Published in print January 2012 | ISBN: 9780199600854
Published online May 2012 | e-ISBN: 9780191738104 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199600854.003.0001
Introduction

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Occupational pensions are a relatively recent innovation, but their history is well documented. We begin the book with the issue of why occupational pension systems came into being, what their current purpose is, and whether they meet the (relatively modest) goals as set out in many governments’ policy manifestos. This forms the backdrop for our critical examination of financial decision-making, and in particular saving for retirement. We emphasize the importance of risk, uncertainty, and scale in navigating financial markets awash with information. Individuals vary in their level of sophistication of financial knowledge and risk decision-making, and use a range of techniques from financial calculation to reliance on peers to intuition. How individual choice is exercised through financial decision-making in the context of culture and emotion is not very well understood. Given the significance of financial information and knowledge for well-being and the absence or thorough investigation in the literature, we introduce a considerable research program which investigates the core questions that underpin individual decision-making. In particular, we use econometric methods to demonstrate the significance of the socio-demographic attributes of people in risk-related decision-making.

Keywords: financial decision-making; risk; uncertainty

Chapter.  7228 words. 

Subjects: Pensions

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