"Save More Tomorrow" (Thaler and Benartzi) is an effective retirement-savings program because it uses which behavioral insights?

Question

Answer

People find it easier to commit to saving more in the future than to cut spending today (present bias / time inconsistency).

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The program works by forcing employees to immediately and sharply cut their current consumption.

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Savings-rate increases are timed with pay raises, so take-home pay never visibly decreases (loss aversion).

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Once enrolled, increases happen automatically, which exploits inertia in the saver's favor.

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