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Renegotiation of social contracts by majority rule
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Anderberg, Dan and Perroni, Carlo (2000) Renegotiation of social contracts by majority rule. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.566).
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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
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. We also find that, with voting-based renegotioation, the availability of costly ex-post information about private investment can help overcome commitment problems. These findings call into question the practice of using a representative-consumer approach when modelling dynamic policy problems in large economies.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | J Political Science > JC Political theory | ||||
Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Social contract, Social security, Distribution (Economic theory), Education -- Economic aspects, Policy sciences | ||||
Series Name: | Warwick economic research papers | ||||
Publisher: | University of Warwick, Department of Economics | ||||
Place of Publication: | Coventry | ||||
Official Date: | 4 August 2000 | ||||
Dates: |
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Number: | No.566 | ||||
Number of Pages: | 29 | ||||
Status: | Not Peer Reviewed | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Funder: | Socialvetenskapliga forskningsrådet (Sweden) (SF) | ||||
Grant number: | 95:0129 (SF) |
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