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Intergenerational transfers and private savings : An experimental study

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  • van der Heijden, E.C.M.

    (Tilburg University, School of Economics and Management)

  • Nelissen, J.H.M.

    (Tilburg University, School of Economics and Management)

  • Potters, J.J.M.

    (Tilburg University, School of Economics and Management)

  • Verbon, H.A.A.

    (Tilburg University, School of Economics and Management)

Abstract

SUMMARY This paper presents the results of an overlapping‐generations experiment on the individual choice between intergenerational transfers and savings. One dominant finding of our experiment is that if savings are possible individuals choose to (gradually) opt out of the intergenerational transfer system. In that case the average individual pay‐offs are lower but their distribution among individuals is less volatile. This suggests that risk aversion is a driving force behind the decline of intergenerational transfers. The willingness to give to previous generations does not disappear completely, however. Moreover, the degree of cohesion between successive generations, measured by (lie correlation between current and past transfers does not diminish significantly after the introduction of (he savings option. ZUSAMMIENEASSUNG Dicser Artikcl präsentierl die ErgebnisseeinesOvcrlapping‐Generations‐Experitnents, indent sich die Tcilnehmer zwisehen tnlergenerationalcn Transfers und Sparen entscheiden mussten. Eines der Hauptergcbnisse besteht darin, dass die Einführung der Mögliehkeit zur individuellen Zukunfts‐vorsorge durch Sparen zu einer (allmählichen) Zurückdrängung von intergencrationalen Transfers führt. Im Fall des Sparens isl die durehschnittliche individuclle Auszahlung zwar geringer, dafür aber weniger unsieher. Die Zurückdrangung intergenerationaler Transfers lässt sich dahcr durch Risikoaversion erklären. Dennoch verschwindct die Bereitschaft, an die vorausgehende Generation abzugeben, nicht völlig. Ausserdein vennindert sich die Stärke des Zusatnnienhalts zwisehen aufcinanderlolgcnden Generalionen, getnessen durch die Korrelation zwisehen gegenwärtigen und früheren Transfers, nicht wesentlich durch die Einführung der Mögliehkeit des Sparens. RÉSUMÉ Le papier présente des résultats expérimentaux sur les choix individuels entre transferts inter‐génération et épargnc. Un des résultats principaux est que s'il est possible d'épargncr, alors (progressivement) le
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • van der Heijden, E.C.M. & Nelissen, J.H.M. & Potters, J.J.M. & Verbon, H.A.A., 1997. "Intergenerational transfers and private savings : An experimental study," Other publications TiSEM bd8e413a-e47a-4f2b-9c1e-3, Tilburg University, School of Economics and Management.
  • Handle: RePEc:tiu:tiutis:bd8e413a-e47a-4f2b-9c1e-3f3cd144d3db
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    Cited by:

    1. Emin Karagözoglu & Arno Riedl, 2010. "Information, Uncertainty, and Subjective Entitlements in Bargaining," CESifo Working Paper Series 3133, CESifo.
    2. Marianna Baggio & Luigi Mittone, 2019. "Grandparents Matter: Perspectives on Intergenerational Altruism and a Pilot Intergenerational Public Good Experiment," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 35(4), pages 255-276, April.
    3. Artidiatun Adji & James Alm & Paul J. Ferraro, 2009. "Experimental tests of Ricardian equivalence with distortionary versus nondistortionary taxes," Economics Bulletin, AccessEcon, vol. 29(4), pages 2556-2572.
    4. Tausch, Franziska & Potters, Jan & Riedl, Arno, 2013. "Preferences for redistribution and pensions. What can we learn from experiments?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 12(3), pages 298-325, July.

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