Designing Benefit Rules for Flexible Retirement with or without Redistribution
AbstractThe traditional approach to flexible retirement (e.g. NDC) neglects the impact of asymmetric information on actuarial fairness (neutrality). The mechanism design approach (e.g. Diamond, 2003) gives up the requirement of neutrality and looks for a redistributive second-best benefit-retirement-age schedule. Trying to combine the two approaches, the present paper determines the neutral (redistribution-free) second-best solution. This neutral solution is, however, often Pareto-dominated by the redistributive one.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1370.
Date of creation: 2004
Date of revision:
flexible retirement; asymmetric information; actuarial fairness (neutrality); mechanism design;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-01-16 (All new papers)
- NEP-MIC-2005-01-16 (Microeconomics)
- NEP-PBE-2005-01-16 (Public Economics)
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