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Information and Dynamic Adjustment in Life Insurance Markets

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Author Info
Matthias Messner (University Pompeu Fabra)
Mattias K. Polborn (University of Munich and the University of Western Ontario Department of Economics)

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Abstract

We analyze an overlapping generations model of voting over ``reform projects''. These resemble investments in that they first require some investment expenditure and later bring a payoff; consequently, older people are more conservative (against reforms) than younger ones. We show that if people vote about a constitution (which is a rule what majority is required in an election for a reform to take place), the constitution will require more than a simple majority. Moreover, from an intuitive social point of view, the equilibrium constitution is too conservative.

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File URL: http://economics.uwo.ca/econref/WorkingPapers/researchreports/wp1999/wp9912.pdf
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Publisher Info
Paper provided by University of Western Ontario, Department of Economics in its series UWO Department of Economics Working Papers with number 9912.

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Date of creation: Oct 1999
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Handle: RePEc:uwo:uwowop:9912

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Postal: Department of Economics, Reference Centre, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2
Phone: 519-661-2111 Ext.85228
Web page: http://economics.uwo.ca/econref/WorkingPapers/

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Related research
Keywords: Constitution; conservatism; overlapping generations; political economy;

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Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior

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    Other versions:
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    Other versions:
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