Framing and the annuitization decision – Experimental evidence from a Dutch pension fund
| Autor: | Joyce Vonken, Christian Bockweg, Onno W. Steenbeek, Eduard Ponds |
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| Přispěvatelé: | Department of Economics, Research Group: Economics, Center Ph. D. Students, Business Economics |
| Jazyk: | angličtina |
| Rok vydání: | 2017 |
| Předmět: |
Consumption (economics)
Organizational Behavior and Human Resource Management Economics and Econometrics Pension Pension plan 050208 finance Actuarial science Accrual Strategy and Management Mechanical Engineering 05 social sciences Life annuity Control (management) Metals and Alloys Investment (macroeconomics) Pension fund Industrial and Manufacturing Engineering Framing (social sciences) Framing (construction) 0502 economics and business Economics 050207 economics Lump sum Finance |
| Zdroj: | Journal of Pension Economics and Finance, 17(3), 385-417. CAMBRIDGE UNIV PRESS Journal of Pension Economics and Finance, 17(3), 385-417. Cambridge University Press |
| ISSN: | 1475-3022 1474-7472 |
| DOI: | 10.1017/S147474721700018X |
| Popis: | We report the effects of framing settings in annuity demand after conducting a survey-based experiment with members of a Dutch occupational pension plan. We gave participants the option to allocate up to 20% of their projected pension accrual to a lump sum. In particular, we investigated the joint effects of consumption and investment frames and gain and loss frames. We present strong evidence for framing effects in annuity demand. Framing effects remain significant when we control for individual characteristics. We also find robust evidence of individual characteristics influencing annuity demand, highlighting the importance of heterogeneity among participants, for example risk aversion, time preference and trust in the pension fund. Gender and long-term debt positions have significant impact how one responds to framing. We conclude that Dutch plan members generally welcome the partial lump sum option over mandatory full annuitization. The application of frames appears to predictively steer annuity demand. The precise effect framing may have, would probably also depend on the institutional environment, which predefines the perspective through which individuals filter annuities. |
| Databáze: | OpenAIRE |
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