Behavioral regularities in old age planning
Bonsang, Éric; Joan, Costa-Font (2020), Behavioral regularities in old age planning, Journal of Economic Behavior & Organization, 173, p. 297-300. 10.1016/j.jebo.2019.11.015
TypeArticle accepté pour publication ou publié
Journal nameJournal of Economic Behavior & Organization
MetadataShow full item record
Laboratoire d'Economie de Dauphine [LEDa]
Laboratoire d'Economie et de Gestion des Organisations de Santé [Legos]
Institut de Recherche pour le Développement (IRD)
SCHOOL OF ECONOMICS AND POLITICAL SCIENCE LONDON GBR
Abstract (EN)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.
Subjects / KeywordsBehavioral regularities; Old age care; Retirement; Financing long-term care; Cognitive bias; Optimism bias; Present bias; Framing; Optimism
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