Annuity Puzzles

Journal of Economic Perspectives, Fall 2011

36 Pages Posted: 14 Oct 2011  

Shlomo Benartzi

University of California at Los Angeles

Alessandro Previtero

Indiana University - Kelley School of Business - Department of Finance

Richard H. Thaler

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Date Written: October 13, 2011

Abstract

We analyze the long-standing “annuity puzzle” through the lens of behavioral economics. We provide novel evidence that lessens the extent of the puzzle and shed some additional light on the real drivers of the decision to annuitize. Last, we discuss the policy implications of our findings.

Keywords: Behavioral Finance, Household FInance, Annuity Puzzle, Inertia, Framing Effects

JEL Classification: D03, D14, G11, G22, H55

Suggested Citation

Benartzi, Shlomo and Previtero, Alessandro and Thaler, Richard H., Annuity Puzzles (October 13, 2011). Journal of Economic Perspectives, Fall 2011 . Available at SSRN: https://ssrn.com/abstract=1943599 or http://dx.doi.org/10.2139/ssrn.1943599

Shlomo Benartzi

University of California at Los Angeles ( email )

D410 Anderson Complex
Los Angeles, CA 90095-1481
United States
310-206-9939 (Phone)
310-267-2193 (Fax)

Alessandro Previtero (Contact Author)

Indiana University - Kelley School of Business - Department of Finance ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States
+1 (512) 581-5420 (Phone)

HOME PAGE: http://aleprevitero.com

Richard H. Thaler

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-5208 (Phone)
773-702-0458 (Fax)

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