Cognitive Decline, Limited Awareness, Imperfect Agency, and Financial Well-being

John Ameriks (), Andrew Caplin, Minjoon Lee, Matthew Shapiro and Christopher Tonetti

No 29634, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Cognitive decline may lead older Americans to make poor financial decisions. Preventing poor decisions may require timely transfer of financial control to a reliable agent. Cognitive decline, however, can develop unnoticed, creating the possibility of suboptimal timing of the transfer of control. This paper presents survey-based evidence that wealthholders regard suboptimal timing of the transfer of control, in particular delay due to unnoticed cognitive decline, as a substantial risk to financial well-being. This paper provides a theoretical framework to model such a lack of awareness and the resulting welfare loss.

JEL-codes: D14 E21 G51 G53 (search for similar items in EconPapers)
Date: 2022-01
New Economics Papers: this item is included in nep-age, nep-cwa, nep-mac and nep-neu
Note: AG EFG ME
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published as John Ameriks & Andrew Caplin & Minjoon Lee & Matthew D. Shapiro & Christopher Tonetti, 2023. "Cognitive Decline, Limited Awareness, Imperfect Agency, and Financial Well-Being," American Economic Review: Insights, vol 5(1), pages 125-140.

Downloads: (external link)
http://www.nber.org/papers/w29634.pdf (application/pdf)

Related works:
Journal Article: Cognitive Decline, Limited Awareness, Imperfect Agency, and Financial Well-Being (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:29634

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w29634

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().