 How much social insurance do you want? An experimental studyFriedel Bolle, Hannah Liepmann and Claudia Vogel Journal of Economic Psychology, 2012, vol. 33, issue 6, 1170-1181 Abstract: Social insurance such as unemployment insurance is in many countries mandatory for the majority of workers. The extent of such insurance is determined by a political process, i.e. ultimately by the workers themselves. If unemployment were purely accidental then all risk averse workers should vote for a party which promises complete coverage of the unemployment risk. In an experimental investigation on the basis of the Solidarity Game (Selten & Ockenfels, 1998) we compare voluntary ex post-solidarity transfers toward unfortunate low income subjects with mandatory solidarity transfers for which the rules are determined ex ante in a voting procedure. Less than a quarter of our subjects vote for complete coverage of their and others’ risks and less than 12% vote for zero transfers. This result can neither be explained by Expected Utility Theory nor by income based social preferences nor by standard parameterizations of Prospect Theory (Kahneman & Tversky, 1979; Tversky & Kahneman, 1992). The results are compatible with a warm glow approach (Andreoni, 1990) which extends to mandatory transfers. Keywords: Solidarity; Social insurance; Experimental economics (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:33:y:2012:i:6:p:1170-1181 DOI: 10.1016/j.joep.2012.07.008 Access Statistics for this article Journal of Economic Psychology is currently edited by G. Antonides and D. Read More articles in Journal of Economic Psychology from Elsevier |
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