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Retirees are increasingly responsible for managing their retirement savings. The ability to manage these assets efficiently can have an important impact on retirement well-being. Lower levels of cognitive ability in old age can reduce an investor's ability to control emotional responses to a loss. Greater sensitivity to loss may increase preferences for safety following a market decline, resulting in allocations away from stocks that are associated with long-term underperformance. We investigate whether cognitive ability is related to stock reallocations among retirees during the Great Recession. Using the Health and Retirement Study, we find that cognitive ability is negatively related to allocations away from stock. Compared to those with the lowest levels of cognitive ability, respondents with higher cognitive ability are 40% less likely to reduce their stock allocation by 50% or more. These results suggest that the quality of investment decisions in old age may be compromised by cognitive decline.Retirees are increasingly responsible for managing their own retirement savings. The shift from defined benefit (DB) to defined contribution plans in the United States transfers the burden of asset management from professionals to individual investors. The ability to manage these assets efficiently can have an important impact on retirement well-being.Studies of investor behavior in mutual funds show that individual investors underperform the market by about 150 basis points annually, mainly because they sell stock funds during a bear market (Friesen and Sapp 2007). This tendency to shift investment portfolios away from equities following a price decline is opposite to what would be expected through optimal rebalancing. The most commonly used model to explain investor trading and allocation decisions is the mean-variance model (Markowitz 1952). Under modern portfolio theory, portfolio allocations between the risky and riskless asset are based on the investor's risk tolerance. Because investors have stable risk preferences and incorporate all available historical data when forming beliefs about risky outcomes, they will select an optimal portfolio that is unaffected by short-run market performance.

Previous research indicates that the work of women is often devalued rela‐ tive to that of men. Two experiments tested the hypothesis that such sex bias appears when judges follow ambiguous guidelines or criteria in making evalua‐ tions, but not when they tollow clear evaluation guidelines. In each experiment, male and female undergraduates evaluated a performance that was attributed to either a man or woman (an intellectual test performance in Experiment I; an artistic craft object in Experiment 11). Subjects followed either clear, explicit evaluation criteria or vague, ambiguous criteria. As predicted, female subjects Lyaluated the “female's” performance less favorably than the “male's” only when. criteria were vague. In contast, male subjects showed little evidence of sex bias, regardless of the criteria they followed. Discussion centers upon: (1) possible cognitive processes underlying the observed effects of clear criteria; and (2) potential practical applications designed to alleviate sex bias in naturalistic settings.

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Previous investigators have suggested that women display lower selfconfidence than men across almost all achievement situations. The empirical validity of this suggestion is assessed in an experiment testing the hypothesis that performance evaluation guidelines moderate sex differences in self-confidence. Undergraduates read the guidelines by which their performance on an impending test would be evaluated. Guidelines were: ambiguous (A); clear-specifying the dimensions of perfonnance to be examined, but not providing any examples of others' performance against which subjects' work would be compared (C); or clear with performance examples (CE). Subjects then completed the test and estimated how well they had done. Results showed the predicted pattem in conditions A and C: While women underestimated their actual perfonnance much more than men when guidelines were ambiguous, they did not do so when guidelines were clear. Further, the rise in self-confidence for women from conditions A to C was greater than that for men. Also as predicted, both sexes' self-confidence and performance were higher in condition C than in condition A. Finally, although condition CE was expected to depress only women's self-confidence and performance, both sexes showed this effect. It is concluded that sex differences in self-confidence are moderated by situation variables and that programs designed to reduce such differences might be improved by a greater focus upon women's response to clearly specifiable factors in achievement settings.In almost all academic, business, and professional realms, far fewer women tban men attain bigb levels of acbievement (e.g..