Defined terms for the annuity market and lifetime income landscape.
Mutualization is the institutional arrangement, central to the ergodicity-economics treatment of cooperation, in which agents jointly own and bear the outcomes of a shared risk pool, so that each member's individual outcome becomes a function of the pool's aggregate experience.
A non-ergodic system is a system in which the time average and the ensemble average of an outcome differ — the average outcome experienced by a single agent over time is not equal to the average outcome across many agents at a single moment.
Path dependency is the property of a system in which the outcome at any point depends on the specific sequence of events that produced it, not merely on the total amount or distribution of those events.
Risk sharing in the ergodicity context is the mechanism, identified in Ole Peters' ergodicity economics, by which agents who would each face a non-ergodic outcome alone pool their realized outcomes so that each member's time-average experience converges on the ensemble average.
Ruin probability is the chance that a process crosses an absorbing barrier — typically zero wealth in financial contexts — within a specified time horizon.
