Intergenerational Risk Sharing by Means of Pay-as-You-Go Programs - an Investigation of Alternative Mechanisms
In: CESifo Working Paper Series No. 1759
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In: CESifo Working Paper Series No. 1759
SSRN
In: Economica, Band 87, Heft 345, S. 249-281
SSRN
In: NHH Dept. of Economics Discussion Paper No. 18/2013
SSRN
Working paper
In: Public choice, Band 145, Heft 1-2, S. 165-180
ISSN: 1573-7101
We suggest a probabilistic voting model where voters' preferences for alternative public goods display habit formation. Current policies determine habit levels and in turn the future preferences of the voters. This allows the incumbent to act strategically in order to influence the probability of reelection. Comparing to a benchmark case of a certain reelection, we demonstrate that the incumbent's optimal policy features both a more polarized allocation between the alternative public goods and a debt bias. Adapted from the source document.