Framing and Claiming: How Information-Framing Affects Expected Social Security Claiming Behavior.
Jeffrey R Brown1, Arie Kapteyn2, Olivia S Mitchell3
1Department of Finance, University of Illinois, 515 East Gregory Drive, Champaign, IL 61820.
The Journal of Risk and Insurance
|June 6, 2017
Summary
Social Security benefit claiming decisions are influenced by how options are presented, contradicting standard economic theories. Framing effects, particularly "breakeven analysis," significantly impact choices, especially for financially vulnerable individuals.
Area of Science:
- Behavioral Economics
- Public Finance
- Decision Science
Background:
- Social Security claiming decisions are critical for retirement income security.
- Traditional economic models assume rational decision-making, which may not apply to complex choices like benefit claiming.
Purpose of the Study:
- To investigate the impact of framing on Social Security benefit claiming behavior.
- To test whether framing effects are consistent with expected utility theory.
Main Methods:
- A randomized experiment was employed to control for individual differences.
- Participants' claiming decisions were analyzed under different framing conditions, including 'breakeven analysis' and gain framing.
Main Results:
- Framing significantly affects claiming decisions, demonstrating inconsistency with expected utility theory.
- A 'breakeven analysis' framing encouraged earlier claiming.
- Gain framing and anchoring at older ages led to delayed claiming.
- Financial literacy, credit card debt, and earnings level moderated the influence of framing.
Conclusions:
- Social Security claiming behavior is susceptible to cognitive biases and framing effects.
- Policy interventions and financial education should consider framing to improve claiming decisions, especially for vulnerable populations.
Related Concept Videos
03:26Framing Effects
8.0K
Information is everywhere and its presentation—such as how and when items are presented—can impact our perceptions and decisions surrounding the info. This broad concept umbrellas framing effects—influences that occur due to the way information is framed in its appearance, whether it’s purely the order or the specific wording of a message. Let’s take a look at numerous ways in which two versions of something can objectively say the same thing, yet we respond in...
8.0K
01:42Schemas
12.5K
A schema is a mental construct consisting of a cluster or collection of related concepts (Bartlett, 1932). There are many different types of schemata, and they all have one thing in common: schemata are a method of organizing information that allows the brain to work more efficiently. When a schema is activated, the brain makes immediate assumptions about the person or object being observed.
12.5K
01:30Impact of Schemas
237
Schemas are cognitive structures that provide a framework for interpreting and organizing social information. They help individuals navigate complex environments by offering expectations about people, events, and behaviors. Schemas influence attention, encoding, and retrieval processes, thereby shaping the entire trajectory of information processing in social contexts.Attention and Cognitive LoadDuring initial attention, schemas function as filters that prioritize schema-consistent information,...
237
01:09First Impression
282
First impressions play a crucial role in social perception, shaping how individuals assess others in professional, academic, and interpersonal contexts. Psychological research highlights the significance of cognitive biases, such as the primacy and recency effects, which influence how people interpret and recall information.The Primacy Effect and Cognitive AnchoringThe primacy effect describes the tendency for initial information to impact judgment disproportionately. When individuals encounter...
282
02:05Self-Presentation: Self-Monitoring and Self-Handicapping
44.9K
People can go to great lengths to protect their self-image and present themselves in ways that they want others to see them. Sociologist Erving Goffman presented the idea that a person is like an actor on a stage. Calling his theory dramaturgy, Goffman believed that we use “impression management” to present ourselves to others as we hope to be perceived. Each situation is a new scene, and individuals perform different roles depending on who is present (Goffman, 1959). Think about...
44.9K
01:29Processes of Self-Presentation
280
Effective self-presentation is a central component of social interaction and identity construction. It relies on the dynamic processes of defining the situation and engaging in self-disclosure. These mechanisms help individuals navigate social context expectations and manage how others perceive them, fostering mutual understanding and relationship development.Defining the SituationSocial situations are shaped by collectively understood frames—a set of widely understood rules or...
280