When individuals are faced with too many options, they become paralyzed and don’t make the best decisions – even when it comes to 401(k) options, according to a new study co-authored by Columbia Business School and University of Chicago Booth School of Business.
The study, released on June 30 by Columbia Business School Professor Sheena Iyengar and University of Chicago Associate Professor of Economics Emir Kamenica, examines this paradox of choice, which found that the more fund options an employee has to choose from, the more it deters a person from enrolling in a plan.
