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Subadditivity in Resource Allocation: An Experimental Study of the Hong Kong Mandatory Retirement Protection Scheme

Author

Listed:
  • Ricky S. Wong

    (Department of Supply Chain Management, Hang Seng Management College, Hong Kong)

  • Wai Hung Wong

    (Hang Seng Management College, Hong Kong)

Abstract

This paper investigates the effect of subadditivity on how individuals allocate their savings to the Mandatory Provident Fund (MPF) scheme. Findings indicated that when an MPF category is unpacked into its subcategories, individuals tend to allocate a higher percentage of their savings to that fund and that the perceived readiness of fund comprehension mediated the relationship between unpacking and people¡¦s allocation. One major contribution is that decision makers¡¦ choices of MPFs depend on how the information is presented to them.

Suggested Citation

  • Ricky S. Wong & Wai Hung Wong, 2014. "Subadditivity in Resource Allocation: An Experimental Study of the Hong Kong Mandatory Retirement Protection Scheme," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 13(2), pages 93-113, December.
    • Handle: RePEc:ijb:journl:v:13:y:2014:i:2:p:93-113
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    References listed on IDEAS

    as
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    4. Stefan Hochguertel & Rob Alessie & Arthur Van Soest, 1997. "Saving Accounts versus Stocks and Bonds in Household Portfolio Allocation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 81-97, March.
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    Keywords

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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