Social Security and the Failure of Annuity Markets

Peter Townley and Robin Boadway

Working Paper from Economics Department, Queen's University

Abstract: This paper investigates the effect of asymmetric information on the annuities market when individuals differ in the probability of dying. Individual behaviour under live-insured and term-insured annuities is investigated. Unlike well-known results of Rothschild and Stiglitz, if an equilibrium exists, it must be a pooling equilibrium. Given the same information as the private sector, a planner can achieve an optimum under certain circumstances.

Pages: 36 pages
Date: 1986
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Journal Article: Social security and the failure of annuity markets (1988)
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:652

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