Behavioral Impediments to Valuing Annuities: Complexity and Choice Bracketing

• 成果类型: Article
• 署名作者: Brown, Jeffrey R.; Kapteyn, Arie; Luttmer, Erzo F. P.; Mitchell, Olivia S.; Samek, Anya
• 署名单位: University of Illinois System; University of Illinois Chicago; University of Illinois Chicago Hospital; National Bureau of Economic Research; University of Southern California; Dartmouth College; University of Pennsylvania; University of California System; University of California San Diego
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_00892
• 发表日期: 2021-07
• 页码: 533-546
• 关键词: annuitization; willingness; fungibility; benefits; DECISION; WEALTH; cash

摘要

This paper examines two behavioral factors that diminish people's ability to value a lifetime income stream or annuity, drawing on a randomized experiment with about 4,000 adults in a U.S. nationally representative sample. We find that increasing the complexity of the annuity choice reduces respondents' ability to value the annuity, measured by the difference between the sell and buy values they assign to the annuity. When we limit narrow choice bracketing by inducing people to think first about how quickly or slowly to spend down assets in retirement, their ability to value an annuity increases.