This report provides a summary of multiple research studies that have examined the impact of the number of investment choices upon investor behavior. The question has become more significant as many employers in recent years have added numerous, sometimes hundreds, of options to their retirement plan menu. Researchers have attempted to determine whether a greater selection of options tends to increase or decrease participation and contribution rates. In sum, the findings indicate that too many investment options can cause information overload, resulting in greater use of the default option and even declines in participation rates.
