Before revision: We use data on annuities to study and evaluate an imperfectly competitive market where firms have private information about their (annuitization) costs. Our data is from Chile, where the market is structured as first-price-auction-followed-by-bargaining, and where each retiree chooses a firm and an annuity contract to maximize her expected present discounted utility. We find that retirees with low savings have the highest information processing cost, and they also care about firms' risk-ratings the most.
After revision: We use data on annuities to study and evaluate an imperfectly competitive market where firms have private information about their costs. We model this interaction using multi-stage and multi-attribute auctions where a retiree--auctioneer--maximizes her find that retirees with low savings have the highest information processing cost, and they also care about firms' risk-ratings the most.