International Journal of Business and Economics

International Journal of Business and Economics
Volume 13, No. 2

December, 2014
Subadditivity in Resource Allocation: An Experimental Study of the Hong Kong Mandatory Retirement Protection Scheme
Ricky S. Wong
Department of Supply Chain Management, Hang Seng Management College, Hong Kong
Wai Hung Wong
Hang Seng Management College, Hong Kong
This paper investigates the effect of subadditivity on how individuals allocate their savings to the Mandatory Provident Fund (MPF) scheme. Findings indicated that when a n MPF category is unpacked into its subcategories, individuals tend to allocate a higher percentage of their savings to that fund and that the perceived readiness of fund comprehension mediated the relationship between unpacking and people's allocation. One major contribution is that decision makers' choices of MPFs depend on how the information is presented to them.
Keywords:subadditivity, resource allocation, mandatory provident fund, mandatory retirement protection.
JEL Classifications:C91, D81, I31.