An experimental test of the under-annuitization puzzle with smooth ambiguity and charitable giving
Hippolyte d'Albis
- Function: Author
- PersonId: 16845
- IdHAL: hippolyte-dalbis
- ORCID: 0000-0002-6409-4320
- IdRef: 07955279X
Giuseppe Attanasi
- Function: Author
- PersonId: 170602
- IdHAL: giuseppe-attanasi
- ORCID: 0000-0003-0848-5770
- IdRef: 186270321
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.
Domains
Economics and FinanceSubmission Type | Notice |
---|---|
Deposit type | Journal articles |
Abstract |
en
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.
|
Title |
en
An experimental test of the under-annuitization puzzle with smooth ambiguity and charitable giving
|
Authors |
Hippolyte d'Albis
1, 2
, Giuseppe Attanasi
3
, Emmanuel Thibault
4
1
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
2
PJSE -
Paris Jourdan Sciences Economiques
( 578027 )
- 48 boulevard Jourdan 75014 Paris
- France
3
GREDEG -
Groupe de Recherche en Droit, Economie et Gestion
( 185786 )
- GREDEG - Bâtiment 2 - Campus Azur du CNRS - 250 rue Albert Einstein - CS 10269 - F
06905 SOPHIA ANTIPOLIS Cedex
- France
4
TSE-R -
Toulouse School of Economics
( 93477 )
- Manufacture de Tabacs, 21 allées de Brienne 31000 Toulouse
- France
|
Journal |
|
Publication date |
2020
|
Volume |
180
|
Page number |
694-717
|
Science popularization |
No
|
Audience |
International
|
Peer-reviewed |
Yes
|
Fulltext language |
English
|
Project/Collaboration |
|
Domain |
|
ANR project(s) |
|
DOI | 10.1016/j.jebo.2019.09.019 |
Loading...