Ryan Bubb

Why Employers Make Bad Choice Architects

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Federal retirement policy has long been premised on the view that many of us, if left to our own devices, will save too little for retirement. A growing literature in behavioral economics has shown that seemingly small nudges in employer retirement plan design, like automatically enrolling workers into contributing to the plan, can have large effects on behavior. Many have seized on these findings to advocate that employers design the “choice architecture” of their 401(k) plans in order to improve their workers’ choices.

Indeed, this approach is widely heralded as the most successful application of behavioral economics to public policy … Read more

Regulating Against Bubbles

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In the Great Recession’s morality play, unscrupulous financiers on the inside of the mortgage industry exploited ordinary folk on the outside. Predatory lenders pushed unsuspecting homebuyers into teaser rate mortgages that seemed affordable but were in fact ticking time bombs. Wall Street’s financial alchemists then packaged these mortgages into impenetrably complex securities, which the credit rating agencies dutifully declared to be triple AAA gold. Everyone on the inside of this chain—the brokers, lenders, securitizers, and rating agencies—took their cut. But when the mortgage bomb finally exploded, the unsuspecting borrowers and investors on the ends of the chain were left in … Read more