Switching Costs and Competition in Retirement Investment Academic Article uri icon


  • © 2019, American Economic Journal: Microeconomics. How do different switching costs affect choices and competition in a private pension system? I answer this question in a setting in which variation in employment status allows me to identify two switching costs that jointly affect enrollees' decisions: the cost of evaluating financial information and the cost of the bureaucratic process that enrollees must navigate when switching. I use this variation to estimate the different switching costs and study their impact on competition among pension funds. I find that though eliminating all switching costs decreases equilibrium fees the most, eliminating either switching cost decreases fees significantly.

altmetric score

  • 9.8

author list (cited authors)

  • Luco, F.

citation count

  • 5

publication date

  • May 2019