Defined terms for the annuity market and lifetime income landscape.
The affect heuristic is a decision shortcut in which an individual's overall emotional response to an option guides the evaluation of its risks and benefits, so that things liked emotionally are judged less risky and more beneficial than things disliked.
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.
Anchoring bias is the tendency for judgments about a quantity to be pulled toward a numerical value that has been recently encountered, even when that value is arbitrary or has no logical relationship to the quantity being judged.
The availability heuristic is a decision shortcut in which the probability or importance of an event is judged by how easily examples of the event come to mind, so that vivid, recent, or emotionally charged instances carry more weight than statistical frequency would justify.
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.
