The optimal portfolio for the two-pillar mandatory pension system: the case of Poland

In the recent decade, there has been observed across the Central and Eastern European states the regulatory trend towards the increase of the non-financial (first) pension pillar size at the expense of the financial (second) pillar. It tends to question the consequences of this shift for the future retirement benefits. Applying the portfolio approach we address this issue by running a series of simulations to find out how to allocate pension contributions between both pillars in an optimal way. Our study contributes to the existing literature as follows. First, we do not perform the assessment of the predetermined regulatory solutions, but we look for an optimal one. Moreover, we allow our optimal rule to be time-varying, if necessary, which would be a true novelty in this research area. Second, we do not base our estimates on historical trends; rather, we apply the long-term economy’s projection to account for the society’s ageing impact, which is a crucially important factor for the solvency of the pension system. Adapting some of the simulation assumptions to fit the Polish case, our results confirm that current regulations underestimate the role of the capital pillar and the optimal allocation between both pillars should be time-varying.     

Designing high commitment — high performance organizations

In this paper the author suggests a number of reasons why in recent years there appears to have been a shift in thinking away from traditional bureaucratic-scientific forms of organization to alternative types of organizational design. In most cases, that thinking has yet to be translated into practial action. Experiments in organizational design are taking place but progress appears to be hindered by the lack of a sufficiently well understood design theory, a clearly existing model to emulate, and not least by a failure to know how we get from “where we are” to “where we want to be”. The author describes some of the basic characteristics of what have been called “high commitment—high performance” organizations, and concludes by offering a step-model towards the creation of such an organization.     

Network externalities and long-run market shares

We study a dynamic duopoly model with network externalities. The value of the product depends on the current and past network size. We compare the market outcome to a planner. With equal quality products, the market outcome may result in too little standardization (i.e. too many products active in the long run) but never too much. The potential inefficiency is non-monotonic in the strength of the network effect, being most likely for intermediate levels. When products differ in quality, an inferior product may dominate even when the planner would choose otherwise, but only if the discount factor is sufficiently large     

On the hellwig method of feasible portfolio construction

The work feasible portfolio is built into the work, that is, the k-dimensional Q column vector with components q_i where q_i 0 for i=1,...,k and q₁+...+q_k=1. We define i=1,...,k in the following way:

When Do Times of Increasing Uncertainty Call for Centralized Harmonization in International Policy Coordination?

Under what conditions do times of increasing uncertainty, such as the ongoing global turmoil, call for international policy harmonization? We shed light on this question by developing a model of interjurisdictional policy coordination taking place under incomplete information and featuring uncertainty about jurisdictions' politico-economic fundamentals. We show how the effect of an increase in uncertainty on the desirability of policy harmonization varies with the pattern of asymmetries in jurisdictions' scale, mutual influence, and magnitude of the increase in uncertainty. Our analysis suggests that the case for policy harmonization as a governance response to growing uncertainty is not compelling.     

On the measurable utility theorem

The paper contains an elementary proof of a generalized version of Aumann's Measurable Utility Theorem.     

Existence of equilibria in atomless production economies with price dependent preferences

The existence of a competitive equilibrium for an economy with a measure space of agents is proved by reducing the economy to a three-person game and then applying Debreu's lemma (1952). In addition to the relative simplicity and shortness of the proof, we generalize known results [Aumann (1966), Hildenbrand (1970), Schmeidler (1969)] by allowing both price dependent preferences and satiation.     

Critical essay on the methodology of multiobjective analysis

This paper presents a discussion of methodological issues in multiobjective analysis, encompassing various approaches to multiobjective optimization and decision making. The main thesis is that while there are already many methods for multiobjective analysis, this field would gain from further methodological reflection.     

Debt Literacy and Debt Literacy Self‐Assessment: The Case of Poland

It is well documented that financial literacy is at best moderate around the world and that the cost of ignorance in this field may be high on both microeconomic and macroeconomic levels. We surveyed a representative sample of Poles to measure their debt literacy—a little‐studied aspect of financial literacy—and therefore obtain insight into the factors predicting it. Our study evidenced low levels of debt literacy and its overestimation by respondents in their self‐reports. We also confirmed some of the patterns found in former studies, including the gender gap and a positive relationship between the level of educational attainment and debt literacy. Finally, our examination provides compelling outcomes with regard to the segmentation of the sample on the basis of objective and subjective debt literacy scores. They show large heterogeneity of debt literacy and thus confirm the need for far‐reaching customization of debt‐oriented education.