Managing a 401(k) Account: An Experiment on Asset Allocation

This paper reports the results of a behavioral finance experiment on asset allocation. Subjects managed a portfolio and made repeated asset allocations to stocks, bonds, and cash. The task was designed to be similar to what a typical investor would face in managing a 401(k) account for twenty years. The primary manipulation in the experiment was the introduction of portfolio future value projections. The results indicate that subjects who...