Preferences for redistribution and pensions. What can we learn from experiments?

F. Tausch, J.J.M. Potters, A. Riedl

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Redistribution is an inevitable feature of collective pension schemes and economic experiments have revealed that most people have a preference for redistribution that is not merely inspired by self-interest. However, little is known on how these preferences interact with preferences for different pension schemes. In this paper, we review the experimental evidence on preferences for redistribution and suggest some links to redistribution through pensions. For that purpose we distinguish between three types of situations. The first deals with distributional preferences behind a veil of ignorance. In the second type of situation, individuals make choices in front of the veil of ignorance and know their position. Finally, we discuss situations in which income is determined by interdependent rather than individual choices. In the closing sections of the paper, we discuss whether and how these experimental results speak to the redistribution issues of pensions. For example, do they argue for or against mandatory participation? Should we have less redistribution and more actuarial fairness? How does this depend on the type of redistribution involved?
Original languageEnglish
Pages (from-to)298-325
JournalJournal of Pension Economics and Finance
Volume12
Issue number3
Publication statusPublished - 2013

Fingerprint

Experiment
Pensions
Redistribution
Veil of ignorance
Pension scheme
Participation
Fairness
Income
Economic experiments

Cite this

@article{501769b2ff094434b03bb72b2b4c9580,
title = "Preferences for redistribution and pensions. What can we learn from experiments?",
abstract = "Redistribution is an inevitable feature of collective pension schemes and economic experiments have revealed that most people have a preference for redistribution that is not merely inspired by self-interest. However, little is known on how these preferences interact with preferences for different pension schemes. In this paper, we review the experimental evidence on preferences for redistribution and suggest some links to redistribution through pensions. For that purpose we distinguish between three types of situations. The first deals with distributional preferences behind a veil of ignorance. In the second type of situation, individuals make choices in front of the veil of ignorance and know their position. Finally, we discuss situations in which income is determined by interdependent rather than individual choices. In the closing sections of the paper, we discuss whether and how these experimental results speak to the redistribution issues of pensions. For example, do they argue for or against mandatory participation? Should we have less redistribution and more actuarial fairness? How does this depend on the type of redistribution involved?",
author = "F. Tausch and J.J.M. Potters and A. Riedl",
year = "2013",
language = "English",
volume = "12",
pages = "298--325",
journal = "Journal of Pension Economics and Finance",
issn = "1474-7472",
publisher = "CAMBRIDGE UNIV PRESS",
number = "3",

}

Preferences for redistribution and pensions. What can we learn from experiments? / Tausch, F.; Potters, J.J.M.; Riedl, A.

In: Journal of Pension Economics and Finance, Vol. 12, No. 3, 2013, p. 298-325.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - Preferences for redistribution and pensions. What can we learn from experiments?

AU - Tausch, F.

AU - Potters, J.J.M.

AU - Riedl, A.

PY - 2013

Y1 - 2013

N2 - Redistribution is an inevitable feature of collective pension schemes and economic experiments have revealed that most people have a preference for redistribution that is not merely inspired by self-interest. However, little is known on how these preferences interact with preferences for different pension schemes. In this paper, we review the experimental evidence on preferences for redistribution and suggest some links to redistribution through pensions. For that purpose we distinguish between three types of situations. The first deals with distributional preferences behind a veil of ignorance. In the second type of situation, individuals make choices in front of the veil of ignorance and know their position. Finally, we discuss situations in which income is determined by interdependent rather than individual choices. In the closing sections of the paper, we discuss whether and how these experimental results speak to the redistribution issues of pensions. For example, do they argue for or against mandatory participation? Should we have less redistribution and more actuarial fairness? How does this depend on the type of redistribution involved?

AB - Redistribution is an inevitable feature of collective pension schemes and economic experiments have revealed that most people have a preference for redistribution that is not merely inspired by self-interest. However, little is known on how these preferences interact with preferences for different pension schemes. In this paper, we review the experimental evidence on preferences for redistribution and suggest some links to redistribution through pensions. For that purpose we distinguish between three types of situations. The first deals with distributional preferences behind a veil of ignorance. In the second type of situation, individuals make choices in front of the veil of ignorance and know their position. Finally, we discuss situations in which income is determined by interdependent rather than individual choices. In the closing sections of the paper, we discuss whether and how these experimental results speak to the redistribution issues of pensions. For example, do they argue for or against mandatory participation? Should we have less redistribution and more actuarial fairness? How does this depend on the type of redistribution involved?

M3 - Article

VL - 12

SP - 298

EP - 325

JO - Journal of Pension Economics and Finance

JF - Journal of Pension Economics and Finance

SN - 1474-7472

IS - 3

ER -