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Experimental tests on consumption, savings and pensions

Enrique Fatas, Juan A. Lacomba (), Francisco Lagos () and Ana Moro-Egido ()
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Juan A. Lacomba: Department of Economic Theory and Economic History, University of Granada.

No 08/14, ThE Papers from Department of Economic Theory and Economic History of the University of Granada.

Abstract: As part of the current debate on the reform of pension systems, this article examines the potential effects on consumption behaviour of implementing a lump-sum payment in a public pension system. This work explores an experimental investigation into retirement consumption behaviour with two central features: first, there exists a decreasing probability of surviving; second, there are two sequences of income, one when individual works and another when she is retired. The results show how subjects seem to plan their consumption and saving choices conditionated by both the long horizon with no incomes and the lump-sum payment. This yields, in the majority of periods, a surprising over-saving behaviour.

Keywords: Experimental test; consumption; savings; lump-sum payment. (search for similar items in EconPapers)
JEL-codes: C91 H55 J26 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2008-12-23
New Economics Papers: this item is included in nep-age, nep-cbe and nep-exp
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