In this study, we use experimental methods to probe how far individuals depart from choices consistent with “Rational Economic Man” and whether these departures are associated with financial and numeric literature on the one hand, and, more fundamentally, with impulsive or analytical thinking—i.e., with cognitive reflection. We examine a purposely biased sample of Greek undergraduates enrolled in a course heavy on statistics and probability who participated in a battery of tests. Specifically, we use the Cognitive Reflection Test (CRT) jointly with numeric and financial literacy tools to understand how “irrational choices” result. Despite the expected bias, responders with lower CRT are more likely to be susceptible to behavioral biases, even when controlling for numeracy and financial literacy. In agreement with other studies, gender is associated with significance differences, which operate both independently and through the mediation of CRT.
Many countries around the world are resorting to mandatory funded components in their multi-pillar pension systems with the purpose of catering for the financial pressure from ageing. This paper aims at analysing the possible replacement rates for such a scheme, by choosing different assumptions and setting the best combined area for the expected result. Then, an approach for analysing the potential for the implementation of such a scheme in Greece is presented along with the actuarially projected expected benefit expenditure and respective accrued capital. A result of the introduction of such a component is expected to be the elevated replacement rate at retirement with a concurrent alleviation of the fiscal burden for the state. The projected scale of savings will also provide domestic financing for investments generating growth.
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