Pierluigi Balduzzi (Chair), Alicia Munnell, Eric Jacquier and Peter Gottschalk, for their careful comments and guidance. In addition, the author is grateful to Shlomo Benartzi for his comments and insight. Finally, the author thanks conference participants from the

This article was UCLA/ Anderson Finance Working Paper no. 10-98. I am grateful for comments fi'om Shlomo Benartzi, Michael J. Brennan, John Cochrane, Amit Goyal, Mark Grinblatt, Jay Ritter, Robert Shiller, Jeremy Siegel, Rene Stulz, Richard Thaler, David Wessels, and Fred Weston. I thank

This article was UCLA/ Anderson Finance Working Paper no. 10-98. I am grateful for comments from Shlomo Benartzi, Michael J. Brennan, John Cochrane, Amit Goyal, Mark Grinblatt, Jay Ritter, Robert Shiller, Jeremy Siegel, Rene Stulz, Richard Thaler, David Wessels, and Fred Weston. I thank

difference between institutions and retail investors that determines dividend payments, not the absolute tax payments. # Allen is from the Wharton School at the University of Pennsylvania. Bernardo and Welch are from the Anderson School at UCLA. The authors thank Laurie Hodrick, Shlomo Benartzi, Charles

to avoid extreme options has been credited with affecting decisions ranging from the demand for wine (Daniel L. McFadden 1999) to voting (Kaisa Herne 1997) and investing (Shlomo Benartzi and Richard H. Thaler 2002). Even more telling of the importance bestowed on the compromise effect is its didactic use

we asked Prof. Shlomo Benartzi of UCLA to help us reach out to some of the leading academics in the field. We then asked each one what key insight they believed would be most important for government and business to consider in crafting policy and developing solutions to counteract the looming post