Defined terms for the annuity market and lifetime income landscape.
Choice architecture is the deliberate design of the environment in which decisions are presented, including how options are ordered, framed, sequenced, and defaulted, on the recognition that these features shape the decisions people actually make.
Choice overload is the observed phenomenon in which increasing the number or complexity of options in a decision can reduce participation, delay selection, or worsen the quality of the choice ultimately made.
A commitment device is a voluntary arrangement that constrains an individual's future options in order to protect a current commitment from being reversed under future preferences the individual anticipates but wishes to override.
Decision fatigue is the decline in the quality and consistency of decisions a person makes after making many decisions in sequence, as the cognitive resources needed for careful deliberation are progressively depleted.
The default effect is the empirical regularity that when a decision has a default outcome that applies if the individual takes no action, most individuals end up with that outcome, at rates well above what would occur if the same choice were presented without a default.
