Welfare gains from illiquid annuities
Mardi | 2011-06-07 B103 – 16h20 Hippolyte D’ALBIS In this article, we challenge the common thought that the annuity contract proposed by Yaari in his seminal 1965’s paper is optimal. We indeed show, in a standard neo-classical framework, that another contract, which actually resembles much more to the contracts that are proposed in the » real world » , may be preferred by rational individuals. According to this contract, the annuities are an illiquid asset and the premium is age independent. […]