| The government of Hong Kong Special Administrative Region (HKSAR) has launched the Mandatory Provident Fund (MPF) scheme for over a decade. Most employees and self-employed persons are required to decide on allocation of their MPF contributions to different fund types. The proposed experimental study joins two streams of research - MPF investment and subadditivity - not typically considered together. Studies have demonstrated subadditivity of human probability judgement: Some unpacking experiments show that an event is perceived to be more likely if its subcases are explicitly "unpacked". This paper considers the effect of subadditivity on how individuals allocate their savings to different types of funds. Specifically, it is postulated that when a fund category is unpacked, individuals tend to allocate a higher percent of their savings to that fund. The experimental findings will also test if perceived readiness of comprehension mediates the relationship between unpacking and the attractiveness of a fund type. |
Updated 07/09/2013