Information Overload in Consumer Response to Annuities: Eye-Tracking and Behavioral Evidence

52 Pages Posted: 22 Mar 2023 Last revised: 23 Mar 2023

See all articles by Joseph Harvey

Joseph Harvey

Consumer Financial Protection Bureau

John G. Lynch

University of Colorado-Boulder, Leeds School of Business - Center for Research on Consumer Financial Decision Making

Philip Fernbach

University of Colorado at Boulder - Department of Marketing

Ji Hoon Jhang

affiliation not provided to SSRN

Date Written: March 20, 2023

Abstract

We illustrate information overload in annuity decisions. More complete, and therefore more complex information about annuity products leads to reduced attention and produces worse consumer choices. In an eye-tracking experiment comparing consumer response to a real, relatively brief annuity brochure and an edited and shortened version of the same brochure, we find that the more complex the materials, the faster attention declines. In a series of choice experiments, we show that increased information volume lowers consumer attention, resulting in lower comprehension of annuity materials and reduced ability to select superior options. We also find that a decision aid in the form of a simplified information cover sheet can mitigate these effects.

Suggested Citation

Harvey, Joseph and Lynch, John G. and Fernbach, Philip and Jhang, Ji Hoon, Information Overload in Consumer Response to Annuities: Eye-Tracking and Behavioral Evidence (March 20, 2023). Consumer Financial Protection Bureau Office of Research Working Paper No. 23-01, Available at SSRN: https://ssrn.com/abstract=4394792 or http://dx.doi.org/10.2139/ssrn.4394792

Joseph Harvey (Contact Author)

Consumer Financial Protection Bureau ( email )

United States

John G. Lynch

University of Colorado-Boulder, Leeds School of Business - Center for Research on Consumer Financial Decision Making ( email )

Leeds School of Business
Boulder, CO 80309-0419
United States
919-971-5201 (Phone)

HOME PAGE: http://https://www.colorado.edu/business/john-g-lynch-jr

Philip Fernbach

University of Colorado at Boulder - Department of Marketing ( email )

United States

Ji Hoon Jhang

affiliation not provided to SSRN ( email )

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