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Behavioral regularities in old age planning

Author

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  • Éric Bonsang

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique, Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres, Institut de Recherche pour le Développement (IRD))

  • Costa-Font Joan

    (SCHOOL OF ECONOMICS AND POLITICAL SCIENCE LONDON GBR - Partenaires IRSTEA - IRSTEA - Institut national de recherche en sciences et technologies pour l'environnement et l'agriculture)

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.

Suggested Citation

  • Éric Bonsang & Costa-Font Joan, 2020. "Behavioral regularities in old age planning," Post-Print hal-02895253, HAL.
    • Handle: RePEc:hal:journl:hal-02895253
    DOI: 10.1016/j.jebo.2019.11.015
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    References listed on IDEAS

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    Cited by:

    1. Park, Hyeon, 2023. "Bounded rationality and optimal retirement age," Journal of Economic Dynamics and Control, Elsevier, vol. 154(C).
    2. Celidoni, Martina & Costa-Font, Joan & Salmasi, Luca, 2022. "Too Healthy to Fall Sick? Longevity Expectations and Protective Health Behaviours during the First Wave of COVID-19," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 733-745.
    3. Kunal Rajesh Lahoti & Shivani Hanji & Pratik Kamble & Kavita Vemuri, 2023. "Impact of Loss-Framing and Risk Attitudes on Insurance Purchase: Insights from a Game-like Interface Study," Papers 2310.13300, arXiv.org.
    4. Eling, Martin & Ghavibazoo, Omid & Hanewald, Katja, 2021. "Willingness to take financial risks and insurance holdings: A European survey," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 95(C).

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    More about this item

    Keywords

    Optimism bias; Present bias; Framing; Optimism; Behavioral regularities; Old age care; Retirement; Financing long-term care; Cognitive bias;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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