Why Retirees Aren't Purchasing Lifetime Annuities: A Summary of the Working Paper, Behavioral Obstacles to the Annuity Market.

The article presents a summary of the working paper by Wei-Yin Hu and Jason S. Scott entitled "Behavioral Obstacles to the Annuity Market." The paper tries to provide a systematic analysis of the annuity decision in light of behavioral finance. Furthermore, loss aversion and the overweighting of small probabilities are important factors that make annuities undesirable than an objective utility analysis would otherwise suggest.