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Attanasi, Giuseppe Marco
, D'Albis, Hippolyte and Thibault, Emmanuel
(2018)
An Experimental Test of the Under-Annuitization Puzzle with Smooth Ambiguity and Charitable Giving.
TSE Working Paper, n. 18-932, Toulouse
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Abstract
In a life-cycle model with a bequest motive, we study the impact of smooth ambiguity aversion to uncertain survival probabilities on the optimal demand for annuities. We implement a theory-driven laboratory experiment. First, a subject's ambiguity attitude is elicited in a simple experimental setting able to make the smooth ambiguity model operational. Then, in a two-period annuity-bequest decision problem, the subject's bequest in the second period is presented as a donation to a previously chosen charity, contingent to the subject being active after the first period. In line with the theoretical predictions, we find that ambiguity-averse (resp., loving) subjects invest less (resp., more) in annuities than ambiguity-neutral ones. Furthermore, subjects'contingent donation to the chosen charity increases in their investment in annuities only for sufficiently high levels of warm-glow altruism.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | July 2018 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Self-insurance, annuity, uncertain survival probabilities, smooth ambiguity aversion, charity, experiment |
| JEL Classification: | C91 - Laboratory, Individual Behavior D81 - Criteria for Decision-Making under Risk and Uncertainty G22 - Insurance; Insurance Companies |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 05 Jul 2018 08:14 |
| Last Modified: | 02 Apr 2021 15:58 |
| OAI Identifier: | oai:tse-fr.eu:32756 |
| URI: | https://publications.ut-capitole.fr/id/eprint/26108 |
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- An Experimental Test of the Under-Annuitization Puzzle with Smooth Ambiguity and Charitable Giving. (deposited 05 Jul 2018 08:14) [Currently Displayed]
