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Renegotiation of Social Contracts by Majority Rule
Carlo Perroni The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics
We consider renegotiation of social earnings insurance arrangements by majority voting in an economy where ex-ante identical individuals make unobservable private investments in education. We show that voting-based renegotiation can result in a higher expected level of investment in comparison to the case where social insurance is determined by an appointed social planner.
Keywords: INSURANCE; EDUCATION; INCOME; VOTING (search for similar items in EconPapers)
JEL-codes: H2 J2 D8 (search for similar items in EconPapers)
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Persistent link: http://EconPapers.repec.org/RePEc:wrk:warwec:566
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