Adverse selection in the annuity market with sequential and simultaneous insurance demand

Susanne Pech; Johann Brunner

doi:10.1007/s10713-006-0558-4

Adverse selection in the annuity market with sequential and simultaneous insurance demand

Institute of Economics

Research output: Contribution to journal › Article › peer-review

Abstract

This paper investigates the effect of adverse selection on the private annuity market in a model with two periods of retirement and two types of individuals, who differ in their life expectancy. In order to introduce the existence of time-limited pension insurance, we consider a model where for each period of retirement separate contracts can be purchased. Demand for the two periods can be decided sequentially or simultaneously. We show that only a situation where all risk types choose sequential contracts is an equilibrium and that this outcome is favourable for the long-living, but is unfavourable for the short-living individuals.

Original language	English
Pages (from-to)	111-146
Number of pages	36
Journal	The Geneva Risk and Insurance Review
Volume	31
Issue number	2
DOIs	https://doi.org/10.1007/s10713-006-0558-4
Publication status	Published - Dec 2006

Fields of science

405002 Agricultural economics
502 Economics
502001 Labour market policy
502002 Labour economics
502003 Foreign trade
502009 Corporate finance
502010 Public finance
502012 Industrial management
502013 Industrial economics
502018 Macroeconomics
502020 Market research
502021 Microeconomics
502025 Econometrics
502027 Political economy
502039 Structural policy
502042 Environmental economics
502046 Economic policy
502047 Economic theory
504014 Gender studies
506004 European integration
507016 Regional economy
303010 Health economics

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10.1007/s10713-006-0558-4

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Adverse selection in the annuity market with sequential and simultaneous insurance demand

Abstract

Fields of science

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