Abstract
We consider a life-cycle model with bequest motives, and assume that the individual does not know his/her survival probability and has maxmin utility preferences;weshow that it is optimal not to annuitize but to purchase pure life insurance policies instead.
Keywords
Demand for annuities; Uncertain survival probabilities; Uncertainty aversion; Maxmin;
JEL codes
- D11: Consumer Economics: Theory
- D81: Criteria for Decision-Making under Risk and Uncertainty
- G11: Portfolio Choice • Investment Decisions
- G22: Insurance • Insurance Companies • Actuarial Studies
Reference
Hippolyte D'Albis, and Emmanuel Thibault, “Optimal annuitization, uncertain survival probabilities, and maxmin preferences”, Economics Letters, Elsevier, vol. 115, n. 2, May 2012, pp. 296–299.
Published in
Economics Letters, Elsevier, vol. 115, n. 2, May 2012, pp. 296–299