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Fiscal policy as a temptation control device: Savings subsidy and social security

Tran, Chung


In an environment where individuals suffer from temptation and self-control problems, there are induced preferences for commitment devices. We show that the savings subsidy and social security programs can be properly designed to mitigate the adverse effect of succumbing to temptation and release severity of self-control. Moreover, we disentangle the mechanics behind the two fiscal programs and find that the driving forces are quite different. Welfare gains associated with a social security...[Show more]

CollectionsANU Research Publications
Date published: 2016
Type: Journal article
Source: Economic Modelling
DOI: 10.1016/j.econmod.2016.02.021


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