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We present experimental evidence of systematic decision errors in dynamic portfolio choice. Participants created contingency plans in a lattice model. When returns were independent and identically distributed, most plans were near-optimal for plausible risk preferences. However, under dynamic probabilities, most plans were inefficient, even by First-degree Stochastic Dominance. Allocations showed a lack of sensitivity to probability shifts, consistent with myopic loss aversion. Decision quality improved when participants compared their original plan to precomputed optimal plans. Results highlight the importance of problem framing in dynamic choice and support a libertarian paternalistic approach to choice architecture.

A theoretical framework is developed to analyze individual bracketing behavior in risk aggregation tasks. The methodology is applied in a behavioral experiment with real financial incentives, using pairs of independent binomial gambles. Results reveal substantial variation in bracketing behavior across subjects. Within the relatively homogeneous student sample, this variation is not systematically related to the demographic variables collected in the questionnaire, but it appears linked to gamble risk profiles. Only a minority systematically applies Broad or Narrow Bracketing. In contrast, most subjects display Partial Bracketing with high variability, suggesting choice inconsistency rather than a systematic rule aimed at reducing cognitive burden or maximizing hedonic value.