scholarly journals Choice overload paradox and public policy design. The case of Swedish pension system

Equilibrium ◽  
2016 ◽  
Vol 11 (3) ◽  
pp. 559 ◽  
Author(s):  
Sławomir Czech
Keyword(s):  
Public Policy ◽  
Psychological Factors ◽  
Policy Design ◽  
Pension System ◽  
Status Quo ◽  
Status Quo Bias ◽  
Choice Overload ◽  
Pension Systems ◽  
Funded Pensions ◽  
Choice Approach

In this paper we focus on an adverse effect of extensive choice widely known as ‘choice overload’. We draw on the case of Swedish funded pensions for illustration and analyze the consequences of the design that allowed for maximizing the choice set. The analysis shows limitations of employing the rational choice approach to the real choice decisions biased with common psychological factors and demonstrates that government’s responsibility for the privatized pension system does not end with the design. We also emphasize the need for a decent default option, which would mitigate socially harmful results of adverse behavior effects like procrastination, status quo bias or abstaining from choice. After all, privatized pension systems still belong to the sphere of public policy.

Bias and Democracy

2012 ◽  
Author(s):  
John O. McGinnis
Keyword(s):  
Public Policy ◽  
Special Interest ◽  
Motivated Reasoning ◽  
Status Quo ◽  
Status Quo Bias ◽  
Cultural Cognition ◽  
Political Bias ◽  
New Information ◽  
Legislative Policy ◽  
The Many

This chapter surveys the many kinds of political bias. These include special interest bias, “knowledge falsification” by the majority, innate majoritarian bias, status quo bias, cultural cognition and motivated reasoning, and framing. It then shows that democracy is often able to overcome biases within the citizenry, because it takes only a majority or a relatively modest supermajority of people to change ordinary legislative policy. Thus, if many, or even most, people are imprisoned by their own worldviews, misled by politicians' frames, or remain ignorant of all new information relevant to public policy, the shift of a relatively small portion of voters can often make a decisive difference.

scholarly journals Pareto-improving transition to fully funded pensions under myopia

2021 ◽  
pp. 1-44
Author(s):  
Torben M. Andersen ◽  
Joydeep Bhattacharya ◽  
Marias H. Gestsson
Keyword(s):  
Policy Design ◽  
Future Generations ◽  
Pension Scheme ◽  
Dynamic Efficiency ◽  
Current Generation ◽  
Policy Makers ◽  
Pension Systems ◽  
Funded Pensions ◽  
Pareto Improving ◽  
The Way

AbstractUnder dynamic efficiency, a pay-as-you-go (PAYG) pension scheme helps the current generation of retirees but hurts future generations because they are forced to saveviaa return-dominated scheme. Abandoning it is deemed welfare-improving but typically not for all generations. But what if agents are present-biased (hence, undersave for retirement) and the “paternalistically motivated forced savings” component of a PAYG scheme motivated its existence in the first place? This paper shows it is possible to transition from such a PAYG scheme on to a higher return, mandated fully-funded scheme; yet, no generation is hurt in the process. The results inform the debate on policy design of pension systems as more and more policy makers push for the transition to take place but are forced to recognize that current retirees may get hurt along the way.

Old Age Pensions

2018 ◽  
Author(s):  
Pierre Pestieau ◽  
Mathieu Lefebvre
Keyword(s):  
Old Age ◽  
Pension System ◽  
Labour Force ◽  
Labour Force Participation ◽  
Population Ageing ◽  
Pension Systems ◽  
Demographic Challenges ◽  
Old Age Poverty ◽  
Future Outcomes ◽  
Social Security Benefits

This chapter gives an overview of the type of pension system existing in Europe. Contributive and redistributive systems are opposed but the chapter shows that pension systems are more often a mix of both. The chapter shows how these systems have been more or less effective in tackling old age poverty in most countries and it points to the main challenges that these systems are facing, namely population ageing and low labour-force participation. The major reforms that have been implemented to ensure future sustainability of pension systems are presented but a number of additional changes that should be implemented are discussed. The chapter also presents projections for future outcomes and the link between demographic challenges and social security benefits is highlighted.

scholarly journals Three doors anomaly, “should I stay, or should I go”: an artefactual field experiment

2021 ◽  
Author(s):  
Andrea Morone ◽  
Rocco Caferra ◽  
Alessia Casamassima ◽  
Alessandro Cascavilla ◽  
Paola Tiranzoni
Keyword(s):  
Field Experiment ◽  
Experimental Evidence ◽  
Bayesian Updating ◽  
Anomalous Behavior ◽  
Status Quo ◽  
Experimental Results ◽  
Illusion Of Control ◽  
Optimal Decision ◽  
Status Quo Bias ◽  
The Impact

AbstractThis work aims to identify and quantify the biases behind the anomalous behavior of people when they deal with the Three Doors dilemma, which is a really simple but counterintuitive game. Carrying out an artefactual field experiment and proposing eight different treatments to isolate the anomalies, we provide new interesting experimental evidence on the reasons why subjects fail to take the optimal decision. According to the experimental results, we are able to quantify the size and the impact of three main biases that explain the anomalous behavior of participants: Bayesian updating, illusion of control and status quo bias.

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