Experimental and Game Theoretical Analyses of the Unconditional Basic Income

Toshiji Kawagoe ()
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Toshiji Kawagoe: Future University Hakodate

Chapter Chapter 8 in Empirical Research on an Unconditional Basic Income in Europe, 2019, pp 201-220 from Springer

Abstract: Abstract In this chapter we show the results of economic analyses of the Unconditional Basic Income (UBI)Unconditional Basic Income (UBI) . Moral hazard and adverse selection problems are addressed, which may arise under the UBI scheme. As for the moral hazard problem, the Negative Income Tax (NIT)Negative Income Tax (NIT) and the UBI are compared in a laboratory experimentLaboratory experiment Experiment(s) Laboratory experiment Participants Laboratory experiment Experiment(s) Laboratory (lab) . In a setting where the NIT and the UBI are identical, we find that UBI increases labour supplyLabour supply significantly more than NIT. We also find that more individualistic and competitive people increase their labour supply even when the UBI is introduced. The conjecture that the UBI makes people lazier is rejected. As for the adverse selection problem, we apply a simple evolutionary game model in order to check whether the introduction of the UBI promotes freedom and self-maintenance of the people who have a weaker position in the household, such as women, children, people of advanced age, and people with disabilityDisability . We show that there is an equilibrium where women are willing to marry in order to get a higher income for the household, even if such decisions keep them in their weaker positions.

Keywords: Basic income; Negative income tax; Moral hazard; Adverse selection; Evolutionary game (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-030-30044-9_8

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DOI: 10.1007/978-3-030-30044-9_8

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