Optimal annuitization, uncertain survival probabilities, and maxmin preferences
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; we show that it is optimal not to annuitize but to purchase pure life insurance policies instead.
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- B. Douglas Bernheim, 1989.
"How Strong are Bequest Motives? Evidence Based on Estimates of the Demand for Life Insurance and Annuities,"
NBER Working Papers
2942, National Bureau of Economic Research, Inc.
- Bernheim, B Douglas, 1991. "How Strong Are Bequest Motives? Evidence Based on Estimates of the Demand for Life Insurance and Annuities," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 899-927, October.
- Gilboa, Itzhak & Schmeidler, David, 1989.
"Maxmin expected utility with non-unique prior,"
Journal of Mathematical Economics,
Elsevier, vol. 18(2), pages 141-153, April.
- Thomas Davidoff & Jeffrey R. Brown & Peter A. Diamond, 2003.
"Annuities and Individual Welfare,"
NBER Working Papers
9714, National Bureau of Economic Research, Inc.
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