Descriptive analysis for computer-based decision support
Operations Research
Discount rates inferred from decisions: an experimental study
Management Science
Decisional guidance for computer-based decision support
MIS Quarterly
Decision making over time and under uncertainty: a common approach
Management Science
Timid choices and bold forecasts: a cognitive perspective on risk taking
Management Science
A psychological approach to decision support systems
Management Science
Improving Decision Making by Means of a Marketing Decision Support System
Management Science
Evaluating the Impact of Dss, Cognitive Effort, and Incentives on Strategy Selection
Information Systems Research
Providing Decisional Guidance for Multicriteria Decision Making in Groups
Information Systems Research
DSS Effectiveness in Marketing Resource Allocation Decisions: Reality vs. Perception
Information Systems Research
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As firms continue to abandon pensions in favor of employee-managed retirement plans, tremendous demands are being placed on the decision-making proficiency of future retirees. As reflected in the equity premium puzzle, individual investors tend to hold overly conservative portfolios that provide meager payoffs over time. Consequently, there is growing concern that the vast majority of retirement accounts might be insufficiently funded when employees reach retirement. Given that most retirement plans can now be managed online, a potential solution lies in designing a Web-based decision support system (DSS) that helps future retirees make more-profitable portfolio management decisions. This paper reports the results of a study in which 159 retirement plan participants were asked to use an experimental website to manage a portfolio of retirement investments over a simulated 30-year period. Using a psychological approach toward designing the DSS, myopic loss aversion is put forth as a theoretical explanation for the psychological mechanisms that encourage investors to hold overly conservative portfolios. Armed with this knowledge, three design features---information horizon, system restrictiveness, and decisional guidance---are implemented as part of an overarching design strategy targeted at increasing investors' willingness to take calculated risks. The results indicate that investor conservatism diminishes when the DSS presents prospective probabilities and payoffs over long time horizons. In contrast, short-term information horizons constitute a major stumbling block for investors. However, when confronted with short-term information horizons, risk aversion can be successfully counteracted by configuring a DSS to either restrict the frequency of decisions or to suggest a relatively aggressive portfolio allocation. These findings carry important implications for theory and practice.