Information Overload in Consumer Response to Annuities: Eye-Tracking and Behavioral Evidence
52 Pages Posted: 22 Mar 2023 Last revised: 23 Mar 2023
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.
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