Normann, Marcel Langer, Thomas () (Westfälischen Wilhelms-Universität Münster Lehrstuhl für BWL, insbesondere Finanzierung)
Abstract
With the German pay-as-you-go pension system under severe pressure, private retirement savings will gain more and more importance in the future. This assigns additional responsibility to individuals to choose appropriate saving levels and to make efficient investment decisions to secure old-age income. A lack of self control, and the lure of immediate consumption can be expected to be major concerns for reaching a sufficient retirement income. Unfortunately, within the framework of neoclassical theory it is hardly possible to discuss the consequences of self control problems, appropriate incentive mechanisms, and the engineering of financial products. Instead, such analysis has to build on behavioral theories that abandon the stable and well defined preferences of the homo oeconomicus and explicitly model the conflicts between short-term and long-term interests. In this paper, we introduce such behavioral models, derive useful properties of retirement saving products, and discuss product modifications and innovations.
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Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number
01-40.
Length: 38 pages Date of creation: 29 May 2001 Date of revision: Handle: RePEc:xrs:sfbmaa:01-40
Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged. Contact details of provider: Postal: D-68131 Mannheim Phone: (49) (0) 621-292-2547 Fax: (49) (0) 621-292-5594 Email: Web page: http://www.sfb504.uni-mannheim.de/ More information through EDIRC
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