Overconfidence, Underconfidence, and the Use of Persuasive Messages in the Attainment of Savings Goals

Alexandra Avdeenko, Albrecht Bohne, Markus Frölich () and Niels Kemper

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: The presentation analyzes whether the success of persuasive messages depends on an individual's behavioral bias: If at the onset of a savings period saving goals are chosen with over- or underconfidence, i.e. individuals over- or underestimate their savings potential, individuals might save too little and even stop saving altogether. Thus, given an individual's characteristics different dis- or encouraging messages might help to achieve the savings goals. The messages encourage some individuals to reconsider their self-set goal and to choose either a more ambitious or a more cautious goal. In our experiment we randomly assign moneyboxes in combination with these persuasive messages to 940 current and former clients of a microfinance institution in rural Ethiopia. Two baseline surveys and a recently collected follow-up data allow for an in-depth analysis of the mechanisms and the steps involved in the persuasive process that is likely to lead to different saving performances.

JEL-codes: D12 D91 O12 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-mfd
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:112982

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