September 18, 2008
The Behavioral Finance Forum, an organization dedicated to helping consumers make better financial decisions, will become an initiative of the nonprofit RAND Corporation, leaders of the two groups have announced.
“We're delighted to add the Behavioral Finance Forum to RAND,” said Arie Kapteyn, director of the RAND Labor and Population division. “We think it fits very well with RAND's mission to make a difference by putting the best research-based ideas into practice.”
The Behavioral Finance Forum, also known as BeFi, was founded in 2006 by Shlomo Benartzi, professor at the Anderson School of Management at UCLA, and Warren Cormier, founder and president of the Boston Research Group. Both will continue to be involved with the Behavioral Finance Forum after RAND takes on management of its activities.
Behavioral finance is the study of the psychological factors that shape peoples' financial choices and decisions, including how they invest, how they save, and how they plan for retirement. BeFi was established to bring together academic, financial and governmental leaders interested in cutting-edge behavioral research for practical application.
The Behavioral Finance Forum's main activity is an annual conference in March where leading academic researchers exchange ideas with financial and governmental leaders. Often, these exchanges lead to follow-up projects where the conference participants collaborate to try out new ideas in real-world settings.
“Academicians are providing most of the ideas, but the financial institutions are the distribution channel of getting these new ideas and innovations to the consumer,” Cormier said. “We're hoping RAND can help us continue to expand BeFi, and bring more government policymakers and employers into the mix.”
“RAND is a rare organization that offers objective research and analysis to the public and private sectors,” Cormier said. “We knew RAND could handle the incredibly complex details of running BeFi; they're a thought-leader in the world of public policy, which is very consistent with what we have done with BeFi.”
The Behavioral Finance Forum will be an initiative of RAND Labor and Population, which includes the recently created RAND Center for Financial Decisionmaking. The Behavioral Finance Forum will also draw upon the expertise of the RAND Institute for Civil Justice, which includes the RAND Center for Corporate Ethics and Governance.
“This is a critical time for thinking through the smartest way to regulate financial institutions,” said Robert Reville, director of the RAND Center for Corporate Ethics and Governance. “With BeFi at RAND, there is a unique opportunity for the public and private sectors to come together, informed by cutting-edge research, and address key policy issues related to financial decision-making.”
RAND Labor and Population examines issues involving U.S. labor markets, the demographics of families and children, social welfare policy, the social and economic functioning of the elderly, and economic and social change in developing countries. The RAND Institute for Civil Justice helps make the civil justice system more efficient and equitable by supplying government leaders, private decision-makers and the public with the results of objective, empirically based, analytic research.
Benartzi is a leading authority on behavioral finance with a special interest in consumer finance and participant behavior in defined contribution retirement plans. He is co-chair of the Behavioral Decision-Making Group at The Anderson School of Management at UCLA.
Cormier is the founder and president of Boston Research Group. He developed tools that have become the standard for service quality and trend measurement in the 401(k) arena.