Vista Equipo: Voting over type and generosity of a pension system when some individuals are myopic

Voting over type and generosity of a pension system when some individuals are myopic

This paper studies the determination through majority voting of a pension scheme when society consists of far-sighted and myopic individuals. All individuals have the same basic preferences but myopics tend to adopt a short-term view (instant gratification) when dealing with retirement saving and la...

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Detalles Bibliográficos
Autores Principales:	Cremer, Helmuth, De Donder, Philippe, Maldonado, Dario, Pestieau, Pierre
Formato:	Artículo (Article)
Lenguaje:	Inglés (English)
Publicado:	2007
Materias:	Dual-self model Myopia Social security
Acceso en línea:	https://repository.urosario.edu.co/handle/10336/22442 https://doi.org/10.1016/j.jpubeco.2007.06.001

id	ir-10336-22442
recordtype	dspace
spelling	ir-10336-224422022-05-02T12:37:14Z Voting over type and generosity of a pension system when some individuals are myopic Cremer, Helmuth De Donder, Philippe Maldonado, Dario Pestieau, Pierre Dual-self model Myopia Social security This paper studies the determination through majority voting of a pension scheme when society consists of far-sighted and myopic individuals. All individuals have the same basic preferences but myopics tend to adopt a short-term view (instant gratification) when dealing with retirement saving and labor supply. Consequently, they will find themselves with low consumption after retirement and regret their insufficient savings decisions. Henceforth, when voting they tend to commit themselves into forced saving. We consider a pension scheme that is characterized by two parameters: the payroll tax rate (that determines the size or generosity of the system) and the 'Bismarckian factor' that determines its redistributiveness. Individuals vote sequentially. We examine how the introduction of myopic agents affects the generosity and the redistributiveness of the pension system. Our main result is that a flat pension system is always chosen when all individuals are of one kind (all far-sighted or all myopic), while a less redistributive system may be chosen if society is composed of both myopic and far-sighted agents. Furthermore, while myopic individuals tend to prefer larger payroll taxes than their far-sighted counterparts, the generosity of the system does not always increase with the proportion of myopics. © 2007. 2007 2020-05-25T23:56:29Z info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion 472727 https://repository.urosario.edu.co/handle/10336/22442 https://doi.org/10.1016/j.jpubeco.2007.06.001 eng info:eu-repo/semantics/openAccess application/pdf instname:Universidad del Rosario
institution	EdocUR - Universidad del Rosario
collection	DSpace
language	Inglés (English)
topic	Dual-self model Myopia Social security
spellingShingle	Dual-self model Myopia Social security Cremer, Helmuth De Donder, Philippe Maldonado, Dario Pestieau, Pierre Voting over type and generosity of a pension system when some individuals are myopic
description	This paper studies the determination through majority voting of a pension scheme when society consists of far-sighted and myopic individuals. All individuals have the same basic preferences but myopics tend to adopt a short-term view (instant gratification) when dealing with retirement saving and labor supply. Consequently, they will find themselves with low consumption after retirement and regret their insufficient savings decisions. Henceforth, when voting they tend to commit themselves into forced saving. We consider a pension scheme that is characterized by two parameters: the payroll tax rate (that determines the size or generosity of the system) and the 'Bismarckian factor' that determines its redistributiveness. Individuals vote sequentially. We examine how the introduction of myopic agents affects the generosity and the redistributiveness of the pension system. Our main result is that a flat pension system is always chosen when all individuals are of one kind (all far-sighted or all myopic), while a less redistributive system may be chosen if society is composed of both myopic and far-sighted agents. Furthermore, while myopic individuals tend to prefer larger payroll taxes than their far-sighted counterparts, the generosity of the system does not always increase with the proportion of myopics. © 2007.
format	Artículo (Article)
author	Cremer, Helmuth De Donder, Philippe Maldonado, Dario Pestieau, Pierre
author_facet	Cremer, Helmuth De Donder, Philippe Maldonado, Dario Pestieau, Pierre
author_sort	Cremer, Helmuth
title	Voting over type and generosity of a pension system when some individuals are myopic
title_short	Voting over type and generosity of a pension system when some individuals are myopic
title_full	Voting over type and generosity of a pension system when some individuals are myopic
title_fullStr	Voting over type and generosity of a pension system when some individuals are myopic
title_full_unstemmed	Voting over type and generosity of a pension system when some individuals are myopic
title_sort	voting over type and generosity of a pension system when some individuals are myopic
publishDate	2007
url	https://repository.urosario.edu.co/handle/10336/22442 https://doi.org/10.1016/j.jpubeco.2007.06.001
_version_	1740172592449323008
score	12,131701

Voting over type and generosity of a pension system when some individuals are myopic

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