Excessive Extrapolation and the Allocation of 401(k) Accounts to Company Stock

By Shlomo Benartzi. 2001

719 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/c2e90223d899dc99fb26cde071df8833960c97c8

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Citations in the corpus

The Common Factor in Idiosyncratic Volatility: Quantitative Asset Pricing Implications (2014, background): “Benartzi (2001) and Cohen (2009) show that non-manager employees also tend to overallocate wealth to equity of their employer and offer behavioral interpretations for this phenomenon.”
Opportunity Cost of Capital for Venture Capital Investors and Entrepreneurs (2004, result): “Brennan and Torous (l999) and Benartzi (2000) also study the hurdle rate for holding an underdiversified position in a single asset and reach similar conclusions.”
The Link Between Job Satisfaction and Firm Value, With Implications for Corporate Social Responsibility (2012, positive): “Prior research suggests that employees do not have private information: Benartzi (2001) showed that employees make wrong decisions when investing their 401(k) plans in their own firms, and Bergman and Jenter (2007) found that firms are able to lower total pay by granting their workers overvalued…”
Loyalty-Based Portfolio Choice (2009, background): “This lack of predictive ability is well documented (Benartzi (2001), Huberman and Sengmuller (2004)).”
The Making of an Investment Banker: Stock Market Shocks, Career Choice, and Lifetime Income (2008, background): “3 In addition, if MBAs make career decisions assuming momentum in stock prices (which would be consistent with the retirement allocations studied by Benartzi (2001)), then high stock returns would encourage them to be more inclined to take a job on Wall Street.”
Talk and Action: What Individual Investors Say and What They Do (2005, neutral): “More disturbingly still, many retirement plan participants allocate a substantial fraction of their discretionary retirement funds to company stock (see Benartzi (2001)).”
Home bias in open economy financial macroeconomics (2013, neutral): “t=0 β ( C i,t 1− σ − χi,t l i,t 1 + ω ) , (21)”
The Impact of Salience on Investor Behavior: Evidence from a Natural Experiment (2019, background): “First, investors may perceive the addition of the capital gain variable to their portfolio display as implicit investment advice from the brokerage company (Benartzi 2001).”
Does the Stock Market Fully Value Intangibles? Employee Satisfaction and Equity Prices (2011, background): “Existing empirical studies suggest that employees do not have private information: Benartzi (2001) shows that employees make incorrect decisions when allocating their 401(k) accounts to company stock, and Bergman and Jenter (2007) nd that rms are able to lower total compensation by granting their…”
Do Individual Investors Have Asymmetric Information Based on Work Experience (2011, neutral): “Benartzi (2001) shows that individuals have a preference for own-company stock in 401 (k) plans, and do not earn abnormal returns.”
Fear of the Unknown: Familiarity and Economic Decisions (2007, background): “14 Using evidence from large-scale experimental financial markets, Bossaerts and Plott (2004) find”