We report the results of a decision simulation conducted among 211 adults whose task was to invest in a 401(k) retirement plan. We varied the number of mutual funds (three vs. twenty‐one) offered for investment and assessed investing knowledge with a self‐report measure. The results indicate that less knowledgeable (but not more knowledgeable) investors change their asset allocation strategies as a function of fund assortment size, such that a significantly higher proportion of dollars invested by the less knowledgeable investors is allocated to stocks when choosing from the larger assortment.
No takes yet. Share an insight, caveat, or question.
Morrin et al. (2008) studied this question.
Synapse has enriched 4 closely related papers on similar clinical questions. Consider them for comparative context: