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

Abstract

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.

BACK