People always react to something in relation to how they interpret it. The reaction relates to their thinking and behavior. This paper analyzes the reaction of various groups of people when they are appealed to support a tax law that enforces self-driven direct saving to private sectors.
At the individual level, the cost of not investing is direct such that lack of saving causes lost opportunities. The country also suffers from a lack of money to invest due to a lack of savings. Depending on the social security funds would easily lead to deplorable lifestyles because the amount invested and the returns are very low. Employees ought to have a personal choice over how much to invest and where to invest it.
For the investors between the ages of 40 to 45 years, the aspect of trust would play a vital role in their decision to support the law enforcement campaign. Sociologists and economists interpret trust as a phenomenon that individuals place on institutions so that they can be able to make a decision. They would easily support the drive to enforce the law if they have a confident positive expectation about the campaigner’s motive with respect to their state of affairs especially for such a case that involves risk. Their support is based on the chronicle deposition towards trust, the situations parameters and their historical relationship with the person influencing them to advocate for change. As an investing firm one ought to come clean to these groups and lay down the benefits so as to gain their confidence and make them understand the concern.
Secondly, the lawmakers would also base their decision on trust but quite a different type of trust which is based on professional relationships compared to general investors in their forties. Some would base their support on the deterrence-based trust which is based on consequences people would face in breaking the law; they have the calculus-based trust which depends on the benefits or rewards they would gain based on calculations of the costs and benefits. Lastly, they would also base their trust on the knowledge of the law. It is based on the information and therefore they are likely to invest in gathering enough information and understanding before supporting anything.
The last group of the under-thirties would probably base their decision for support on the identification-based trust. They would perhaps want to know or predict the needs and preferences of the person trying to influence them before they can support them. If the need closely relates to theirs or the preferences are shared, the reaction would be to think, feel and thus respond likewise. Unlike their counterparts in the forties, they still feel they have enough time and the laws would probably change very many times in the future.
Behavior is determined by internal and external factors. The external factors are those that the decision-maker has no control while the internal attributions are assigned to inside factors, agents or choices.
One main approach or argument that would be utilized for the case would be the cognitive approach which exploits the gap that humans ought to believe and what they are likely to believe. The assumption is that human beings will reason in a normatively correct and bias-free manner. The cognitive illusion indicates that people react rationally from self-interest.
People will try to determine why others acted the way they did before they can make a decision and this is the attribute that causes behaviors. Investing enhances personal welfare as well as the economy’s future wealth.
Attribution helps to explain the differences in the motivation of people with regard to their archiving abilities. High achievers are known to approach risks rather than avoid them. (OECD, 17).
Work cited
Organization for economic co-operation and development (OECD), Promoting private investment for development, France: OECD Publishers, 2006.