Transparency and Adverse Selection: Evidence from an Electronic Platform for Annuities

Eduardo Fajnzylber, Maria Gabrielli and Manuel Willington
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Eduardo Fajnzylber: Universidad Adolfo Ibáñez

No 168, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: In this letter we show robust evidence that the introduction of an electronic platform in the Chilean annuity market in 2004 exacerbated adverse selection. Male and femaleannuitants who retired after 2004 live around two years longer than non-annuitants, while before the difference was smaller or non statistically significant. Post 2004, thefraction of annuitants decreased despite the fact that the deals offered by insurance companies improved. These facts are consistent with the electronic platform bringingtransparency, competition, and reducing the scope for sales agents to affect retirees’ choices.

Keywords: Adverse selection; annuities; market transparency; Chilean pension system (search for similar items in EconPapers)
JEL-codes: D82 G14 G22 J32 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2022-08
New Economics Papers: this item is included in nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:aoz:wpaper:168

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