Framing and retirement age : the gap between willingness-to-accept and willingness-to-pay


Merkle, Christoph ; Schreiber, Philipp ; Weber, Martin



DOI: https://doi.org/10.1093/epolic/eix014
URL: http://www.economic-policy.org/wp-content/uploads/...
Additional URL: https://www.researchgate.net/publication/322264586...
Document Type: Article
Year of publication: 2017
The title of a journal, publication series: Economic Policy
Volume: 32
Issue number: 92
Page range: 757-809
Place of publication: Oxford
Publishing house: Blackwell
ISSN: 0266-4658 , 1468-0327
Related URLs: https://academic.oup.com/economicpolicy/article/32/92/757/4459630
Publication language: English
Institution: Business School > ABWL u. Finanzwirtschaft, insbes. Bankbetriebslehre (Seniorprofessur) (Weber)
Subject: 330 Economics
Classification: JEL: D03 , D14 , H55 , J26,
Keywords (English): Retirement Decision , Willigness-to-pay , Willigness-to-accept , Social Security
Abstract: In a large online experiment, we relate the retirement timing decision to the disparity between the willingness-to-accept (WTA) and the willingness-to-pay (WTP). In the WTP treatment, participants indicate the maximum amount of monthly benefits they are willing to give up in order to retire early. In the WTA treatment, the minimum increase of monthly payments in order to delay retirement is elicited. Our results reveal that the framing of the decision problem strongly influences participants' reservation price for early retirement. The willingness-to-accept for early retirement is more than twice as high as the corresponding willingness-to-pay. Using actual values from the German social security system as market prices, we demonstrate that the presentation in a WTA frame can induce early retirement. In this frame, the implicit probability of retiring early increases by 30 percentage points.We further show that the disparity between WTA and WTP is correlated with loss aversion. Repeating the analysis with data from a representative household survey (German SAVE panel), we find similar results.

Dieser Eintrag ist Teil der Universitätsbibliographie.




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