Information and Dynamic Adjustment in Life Insurance Markets
AbstractWe 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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Bibliographic InfoPaper provided by University of Western Ontario, Department of Economics in its series UWO Department of Economics Working Papers with number 9912.
Date of creation: Oct 1999
Date of revision:
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Postal: Department of Economics, Reference Centre, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2
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Constitution; conservatism; overlapping generations; political economy;
Other versions of this item:
- Mattias K. Polborn & Mike Hoy & Asha Sadanand, 1999. "Information and Dynamic Adjustment in Life Insurance Markets," UWO Department of Economics Working Papers 9911, University of Western Ontario, Department of Economics.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-11-28 (All new papers)
- NEP-CDM-1999-11-28 (Collective Decision-Making)
- NEP-HIS-1999-11-28 (Business, Economic & Financial History)
- NEP-LAW-1999-11-28 (Law & Economics)
- NEP-MIC-1999-11-28 (Microeconomics)
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