Since 2000, the individual monthly payments from the Germany Statutory Pension Insurance Scheme (GRV) to new male pensioners have been declining. Those entering retirement today receive an average of 7 percent less than those who retired ten years ago. At the same time, the number of recipients...

Behavioral economics has shaken the view that individuals have well-defined, consistent and stable preferences. This raises a challenge for welfare economics, which takes as a key postulate that individual preferences should be respected. We argue, in agreement with Bernheim (2009) and Bernheim...