Defined terms for the annuity market and lifetime income landscape.
Pooling efficiency is the degree to which a lifetime income pool delivers the structural benefit available from mortality pooling, given the pool's size, governance design, and operating costs.
Risk pooling is the arrangement in which a group of individuals combines their exposure to a shared uncertainty so that the actual cost is borne by the group as a whole and is more predictable for each member than it would be for any one person alone.
Self-annuitization is the self-managed approach to producing retirement income from accumulated savings, in which an individual draws down their own assets to fund income without pooling longevity risk with others or transferring it to an insurer.
Self-selection bias is the systematic difference between individuals who choose to enter an arrangement and the broader population from which they are drawn, arising from unobserved characteristics that make participation more attractive to some than to others.
The Shapley value is the rule, developed by Lloyd Shapley, that divides the gain from cooperation by giving each participant a share equal to their average contribution across all possible orderings in which the coalition could have been built up.
