Russel Sage Foundation

Late last year, the Russell Sage and Alfred P. Sloan Foundations sponsored a competition to solicit proposals for smart disclosure demonstration projects. "Smart disclosure" policies aim to improve consumer markets by providing decision-makers data about their their personal use patterns or histories. Here are some details on the winning proposals:

1. Efficient Web-Based Credit Markets

While the consumer credit market has grown dramatically in the past two decades, consumers find it difficult to systematically compare credit offers (many of which arrive in the mail). Consumers know that their credit score may be downgraded by repeated applications for credit, but a bigger challenge is sorting through lengthy contracts, complicated reward programs, and interest rates. This research project will investigate the potential of a recent policy shift in Sweden, where consumers can "shop" for credit using an online intermediary. When they submit their information -- for example, the amount of credit they seek and their credit score -- the online intermediary supplies their application to participating banks, which can decide to offer a bid to the consumer. The web intermediary standardizes all financial contracts, reduces search costs, and allows consumers to see competing bids in an accessible manner.

2. Doctor Finding Service

Finding a healthcare provider can be difficult: comprehensive information about a doctor -- that is, including malpractice history, patient feedback, outcomes -- is rarely available in one location, and websites often present data using arcane terminology and complicated designs. This research project aims to develop and test a smart disclosure service that captures information local area health care providers and provides consumers an easy to understand interface for finding and comparing health care resources.

3. Allocating Assets in Retirement Portfolios

Investment products are complex: mutual funds, annuities, life insurance, stocks all involve different (and difficult) risk, tax, payout and maturity considerations. In addition, allocating these assets in retirement portfolios over the course of a lifetime, as personal risk preferences and needs shift, make financial planning a daunting task for the average consumer. Seeking advice from professional salespersons is a possible solution, but financial planners may face incentives not aligned with their clients' interests. This research project proposes to develop a smartphone app that gathers a consumer's personal financial information and informs users about deficient and surplus asset categories. The app will also evaluate new financial products to ensure it fits a consumer's basic allocation needs and is not above average in terms of expense ratio or risk exposure and do not fall on any warning lists from the government or reputable consumer organizations.

4. Allocating Assets in Retirement Portfolios

Research shows that less aggressive driving could significantly reduce emissions from vehicles. Some drivers use "echo-driving" techniques that slow acceleration and deceleration to save fuel, but this effort often requires guessing the optimal speed. Moreover, there are other factors that influence fuel usage, such as travel distance, weather, vehicle type, and traffic. This research project aims to create a car-based GPS system that will map the most fuel efficient path of transit based on these factor. It will also indicate optimal acceleration and deceleration rates, and at the end of each drive, the GPS will reveal the driver's savings on fuel costs.

5. Shopping for Cellular Phones in Israel

Choosing a cell phone service in Israel can be complicated. Certain products are offered to specific sectors of the public (such as soldiers and teenagers), and other service plans' cost depend on which numbers consumers dial the most often and their monthly usage. This research project aims to utilize personal cell phone usage data to compare expected costs of different service plans.