The Effect of Different Saving Mechanisms in Pension Saving Behavior: Evidence from a Life-Cycle Experiment

Martin Angerer (), Michael Hanke, Ekaterina Shakina and Wiebke Szymczak
Additional contact information
Martin Angerer: Liechtenstein Business School, University of Liechtenstein, Fürst-Franz-Josef-Strasse, 9490 Vaduz, Liechtenstein
Michael Hanke: Liechtenstein Business School, University of Liechtenstein, Fürst-Franz-Josef-Strasse, 9490 Vaduz, Liechtenstein
Ekaterina Shakina: Newcastle Business School, Northumbria University, Newcastle upon Tyne NE1 8ST, UK
Wiebke Szymczak: Halle Institute for Economic Research, 06108 Halle (Saale), Germany

JRFM, 2025, vol. 18, issue 5, 1-26

Abstract: We examine how institutional saving mechanisms influence retirement saving decisions under bounded rationality and income risk. Using a life-cycle experiment with habit formation and loss aversion, we test mandatory and voluntary binding savings under deterministic and stochastic income. Voluntary commitment improves saving performance only when income is predictable; under uncertainty, it fails to improve performance. Mandatory savings do not raise total saving, as participants reduce voluntary contributions. These results emphasize the role of income smoothing in enabling behavioral interventions to improve long-term financial outcomes.

Keywords: saving mechanism; experiment; income uncertainty; saving behavior (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1911-8074/18/5/240/pdf (application/pdf)
https://www.mdpi.com/1911-8074/18/5/240/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:18:y:2025:i:5:p:240-:d:1647581

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().