The Behaviour and Investment Programme studies behavioural aspects of investment and pension systems. Specifically, we investigate pension funds, their characteristics and governance structures, as well as the retirement savings decisions of individuals. The aim is to understand governance structures of pension funds, and the underlying behavioural flaws inherent in long-term investment decision-making by individuals.
The current pressure for public pension systems arising from demographic shifts, the ageing population, and climate change are of particular interest. In addition, pension funds internationally are under immense pressure. This has resulted in a gradual shift from so-called defined-benefit (DB) to defined-contribution (DC) pension plans thereby creating increased individual responsibility for retirement-saving. As investment decisions by individuals are influenced by certain behavioural inclinations, our goal is to more fully understand these and provide guidance on how individuals can overcome these biases.