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Behavioral regularities in old age planning

Bonsang, Eric and Costa-Font, Joan (2019) Behavioral regularities in old age planning. Journal of Economic Behavior and Organization. ISSN 0167-2681

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Identification Number: 10.1016/j.jebo.2019.11.015

Abstract

Planning for old age needs involves ‘high stakes’ decisions such as the choice of a retirement plan, generic saving and investment decisions alongside the take up of insurance for long-term care . We argue that these individual decisions are formed upon limited information and, result from beliefs about future needs that are often not well understood. This paper provides an overview of a number of behavioral ‘regularities’ that illustrate areas where traditional economic approaches should include behavioral economic explanations to better understand and describe decisions for old age. These include the role of framing and reference points, the effects of misperception and behavioral learning, as well as the role of several biases such as optimism, present bias and overconfidence. We contend that choice architectures that incorporate such regularities can help making old age decisions.

Item Type: Article
Official URL: https://www.journals.elsevier.com/journal-of-econo...
Additional Information: © 2019 Elsevier B.V. All rights reserved.
Divisions: Health Policy
JEL classification: I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy; Regulation; Public Health
I - Health, Education, and Welfare > I3 - Welfare and Poverty > I30 - General
J - Labor and Demographic Economics > J1 - Demographic Economics > J14 - Economics of the Elderly; Economics of the Handicapped
J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J26 - Retirement; Retirement Policies
Date Deposited: 09 Dec 2019 16:51
Last Modified: 24 Jan 2020 00:18
URI: http://eprints.lse.ac.uk/id/eprint/102835

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