Choice management
Trying to make sense of the breadth and complexity of the financial markets can be a Herculean task, one that frustrates even the most seasoned investors. Why, then, do many companies ask their employees to do just that? They shouldn’t, according to Brigitte Madrian, Aetna Professor of Public Policy and Corporate Management at Harvard’s John F. Kennedy School of Government, and David Laibson, the Robert I. Goldman Professor of Economics. In a paper published last year, Madrian and Laibson argued that employers should strive to “design institutions that facilitate good choices, rather than assuming that giving people every option under the sun will lead to the right decision.” The paper, co-authored with James Choi ’98, associate professor of finance at the Yale School of Management, was recently honored with the TIAA-CREF Paul A. Samuelson Award. The annual award recognizes scholarly writing on lifelong financial security. “The view I had when I started this study,...