Experimental tests on consumption, savings and pensions
AbstractAs part of the current debate on the reform of pension systems, this article examines the potential effects on consumption behaviour of implementing a lump-sum payment in a public pension system. This work explores an experimental investigation into retirement consumption behaviour with two central features: first, there exists a decreasing probability of surviving; second, there are two sequences of income, one when individual works and another when she is retired. The results show how subjects seem to plan their consumption and saving choices conditionated by both the long horizon with no incomes and the lump-sum payment. This yields, in the majority of periods, a surprising over-saving behaviour.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economic Theory and Economic History of the University of Granada. in its series ThE Papers with number 08/14.
Length: 31 pages
Date of creation: 23 Dec 2008
Date of revision:
Experimental test; consumption; savings; lump-sum payment.;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-AGE-2009-02-22 (Economics of Ageing)
- NEP-ALL-2009-02-22 (All new papers)
- NEP-CBE-2009-02-22 (Cognitive & Behavioural Economics)
- NEP-EXP-2009-02-22 (Experimental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alexander L. Brown & Colin F. Camerer & Zhikang Eric Chua, 2006. "Learning and Visceral Temptation in Dynamic Savings Experiments," Levine's Bibliography 321307000000000048, UCLA Department of Economics.
- Juan Lacomba & Francisco Lagos, 2007.
"Political election on legal retirement age,"
Social Choice and Welfare,
Springer, vol. 29(1), pages 1-17, July.
- Daniel S. Hamermesh & Paul L. Menchik, 1987.
"Planned and Unplanned Bequests,"
NBER Working Papers
1496, National Bureau of Economic Research, Inc.
- Eytan Sheshinski, 1977.
"A Model of Social Security and Retirement Decisions,"
NBER Working Papers
0187, National Bureau of Economic Research, Inc.
- Sheshinski, Eytan, 1978. "A model of social security and retirement decisions," Journal of Public Economics, Elsevier, vol. 10(3), pages 337-360, December.
- CREMER, Helmuth & PESTIEAU, Pierre, .
"Reforming our pension system: is it a demographic, financial or political problem?,"
CORE Discussion Papers RP
-1468, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Cremer, Helmuth & Pestieau, Pierre, 2000. "Reforming our pension system: Is it a demographic, financial or political problem?," European Economic Review, Elsevier, vol. 44(4-6), pages 974-983, May.
- Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
- Cremer, Helmuth & Lozachmeur, Jean-Marie & Pestieau, Pierre, 2006.
"Social Security and Retirement Decision: A Positive and Normative Approach,"
CEPR Discussion Papers
5542, C.E.P.R. Discussion Papers.
- CREMER, Helmuth & LOZACHMEUR, Jean-Marie & PESTIEAU, Pierre, 2006. "Social security and retirement decision: a positive and normative approach," CORE Discussion Papers 2006019, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- T. Parker Ballinger & Michael G. Palumbo & Nathaniel T. Wilcox, 2003. "Precautionary saving and social learning across generations: an experiment," Economic Journal, Royal Economic Society, vol. 113(490), pages 920-947, October.
- Enrique Fatas & Juan A. Lacomba & Francisco Lagos, 2007. "An Experimental Test On Retirement Decisions," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 602-614, 07.
- Juan Antonio Lacomba & Francisco Miguel Lagos, 2005.
"Population Aging and Legal Retirement Age,"
05/16, Department of Economic Theory and Economic History of the University of Granada..
- Conde-Ruiz, José Ignacio & Galasso, Vincenzo, 2000.
CEPR Discussion Papers
2589, C.E.P.R. Discussion Papers.
- Samwick, Andrew A., 1998.
"Discount rate heterogeneity and social security reform,"
Journal of Development Economics,
Elsevier, vol. 57(1), pages 117-146, October.
- Andrew A. Samwick, 1997. "Discount Rate Heterogeneity and Social Security Reform," NBER Working Papers 6219, National Bureau of Economic Research, Inc.
- Fehr, Hans & Sterkeby, Wenche I. & Thøgersen, Øystein, 2000.
"Social security reforms and early retirement,"
W.E.P. - WÃ¼rzburg Economic Papers
24, University of Würzburg, Chair for Monetary Policy and International Economics.
- Hey, John D & Dardanoni, Valentino, 1987. "Optimal Consumption under Uncertainty: An Experimental Investigation," Economic Journal, Royal Economic Society, vol. 98(390), pages 105-16, Supplemen.
- Cubitt, Robin P & Sugden, Robert, 2001. " Dynamic Decision-Making under Uncertainty: An Experimental Investigation of Choices between Accumulator Gambles," Journal of Risk and Uncertainty, Springer, vol. 22(2), pages 103-28, March.
- Georges Casamatta & Helmuth Cremer & Pierre Pestieau, 2005.
"Voting on Pensions with Endogenous Retirement Age,"
International Tax and Public Finance,
Springer, vol. 12(1), pages 7-28, January.
- CASAMATTA, Georges & CREMER, Helmuth & PESTIEAU, Pierre, . "Voting on pensions with endogenous retirement age," CORE Discussion Papers RP -1754, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Casamatta, Georges & Cremer, Helmuth & Pestieau, Pierre, 2003. "Voting on Pensions with Endogenous Retirement Age," CEPR Discussion Papers 3778, C.E.P.R. Discussion Papers.
- Laibson, David I., 1997.
"Golden Eggs and Hyperbolic Discounting,"
4481499, Harvard University Department of Economics.
- Maribeth Coller & Melonie Williams, 1999. "Eliciting Individual Discount Rates," Experimental Economics, Springer, vol. 2(2), pages 107-127, December.
- Breyer, Friedrich & Kifmann, Mathias, 2002.
"Incentives to retire later a solution to the social security crisis?,"
Journal of Pension Economics and Finance,
Cambridge University Press, vol. 1(02), pages 111-130, July.
- Friedrich Breyer & Mathias Kifmann, 2001. "Incentives to Retire Later: A Solution to the Social Security Crisis?," Discussion Papers of DIW Berlin 266, DIW Berlin, German Institute for Economic Research.
- Enrica Carbone & John D. Hey, 2004. "The effect of unemployment on consumption: an experimental analysis," Economic Journal, Royal Economic Society, vol. 114(497), pages 660-683, 07.
- Crawford, Vincent P & Lilien, David M, 1981. "Social Security and the Retirement Decision," The Quarterly Journal of Economics, MIT Press, vol. 96(3), pages 505-29, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Angel Solano Garcia.).
If references are entirely missing, you can add them using this form.