Denial of Death and Economic Behavior

Topics:
Insurance
Tags:
Business Operations,
Corporate Insurance,
Denial,
Finance,
Financial Planning,
Free Trade,
Insurance,
National Bureau Of Economic Research,
Taxes
Source:
National Bureau of Economic Research

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Overview: This paper models denial of death and its effect on economic behavior. Attempts to reduce death anxiety and the possibility of denial of mortality-relevant information interact with intertemporal choices and may lead to time-inconsistent behavior and other "behavioral" phenomena. The paper shows that the mere possibility of engaging in this kind of denial leads to time-inconsistent but efficient behavior. Refusal to face up to the reality of death may help explain a wide range of empirical phenomena, including the underutilization of tax-advanced inter vivos gifts and inadequate purchase of life insurance.

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Format: PDF | Size: 301KB | Date: Jun 2005 | Pages: 37


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