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| Tekijä: | Sheshinski, E. |
| Otsikko: | Optimum and risk-class pricing of annuities |
| Lehti: | Economic Journal
2007 : JAN, VOL. 117:516, p. 240-251 |
| Asiasana: | equilibrium analysis risk pricing health insurance life insurance retirement ageing models |
| Vapaa asiasana: | annuities |
| Kieli: | eng |
| Tiivistelmä: | With information (here as: info.) on longevity being unknown early in life, individuals have an interest in insuring themselves against moving into different 'risk-classes' (here as: r-cls.) as their life expectancy is revealed. The First-best allocation involves transfers across states of nature. With symmetric info., competitive equilibrium (as: eql.) separates different r-cls. and cannot provide such transfers because insurance firms are not able to precommit. When utility is invariant to r-cls. realization, the optimum entails uniform consumption and optimum retirement age independent of r-cls. and an optimum social security scheme is superiour to competitive eql. When preferences depend on r-cls., welfare ranking of systems becomes indeterminate. |
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