The TIAA-CREF Institute presented the 2011 TIAA-CREF Paul A. Samuelson Award for Outstanding Scholarly Writing on Lifelong Financial Security to:
Brigitte C. Madrian
Aetna Professor of Public Policy and Corporate Management, Harvard University, John F. Kennedy School of Government
David I. Laibson
Professor of Economics, Harvard University
James J. Choi
Associate Professor of Finance, Yale School of Management
"Why Does the Law of One Price Fail? An Experiment on Index Mutual Funds"
(The Review of Financial Studies, 2009)
This paper examines why individuals select high-fee index mutual funds over lower-cost options that can produce the same returns.
Harvard staff, Wharton MBA students, and Harvard undergrads allocated $10,000 across four S&P 500 index funds and were rewarded for their portfolio's subsequent return.
Subjects overwhelmingly failed to minimize fees. Even when provided a one-page "cheat sheet" summarizing funds' fees, subjects placed high weight on annualized returns since inception--a misleading metric, since the four funds had different inception dates.
Those more financially educated generally paid lower fees, demonstrating the need for increased financial education.
2011 Panel of Distinguished Judges
Dr. Julie Agnew, Associate Professor, College of William and Mary
Dr. George Akerlof, Nobel Laureate, Visiting Scholar, International Monetary Fund and Professor, Cal-Berkeley
Dr. Thomas Rietz, Professor, University of Iowa
Dr. Joe Quinn, Professor, Boston College
Dr. Stephen Zeldes, Professor, Columbia University