| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5059891 | Economics Letters | 2012 | 4 Pages |
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; we show that it is optimal not to annuitize but to purchase pure life insurance policies instead.
⺠We study the optimal demand for annuities in a life-cycle model. ⺠The individual displays uncertain survival probabilities and maxmin preferences. ⺠The optimal behavior is to make the welfare independent of the length of life. ⺠This is achieved by selling annuities short.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Hippolyte d'Albis, Emmanuel Thibault,