Defined terms for the annuity market and lifetime income landscape.
Ambiguity aversion is the tendency for individuals to prefer choices with known probabilities over choices with unknown or imprecisely known probabilities, even when the expected outcomes are comparable.
Bequest motive is the desire to preserve capital for transfer to heirs or other beneficiaries at death, which raises the value an individual places on retaining access to and control over savings during retirement.
Framing effects are the pattern in which the choices individuals make depend on how the options are described or presented, so that the same underlying decision produces different selections when the framing changes.
Hyperbolic discounting is a pattern of time preference in which the rate at which individuals discount future outcomes declines as the delay grows longer, producing a stronger preference for the near term over the medium term than for the medium term over the far term.
Loss aversion is the tendency for individuals to weight losses more heavily than equivalent gains, so that avoiding a potential loss produces stronger motivation than pursuing a gain of the same size.
