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Altruism and Reciprocity in the Long-Run

Author

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  • Alejandro Lugón Ceruti

    ( Departamento de Economía de la PUCP)

Abstract

The aim of this paper is to provide a model where altruism is determined endogenously. Altruism is an attitude that influences our actions toward other people. The model presented in this paper assumes that this influence also operates in the opposite direction via reciprocity: that is, people modify their altruism based on the actions of other agents. The paper uses a dynamic setup with two agents whose incomes are random. Depending on the incomes realized, transfers are made. These transfers convey information about the level of altruism of the donors. The agents use this information to adjust their own level of altruism. If the transfer received by an agent implies that the altruism level of the other agent is higher (lower) than that of the receiver, then the latter will increase (decrease) his level of altruism. This behavior induces a stochastic process for the levels of altruism. The long level of altruism is studied using both analytic and computer simulations tools.

Suggested Citation

  • Alejandro Lugón Ceruti, 2018. "Altruism and Reciprocity in the Long-Run," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 41(82), pages 157-188.
    • Handle: RePEc:pcp:pucrev:y:2018:i:82:p:157-188
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    File URL: http://revistas.pucp.edu.pe/index.php/economia/article/view/20913
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    References listed on IDEAS

    as
    1. Laurence Kranich & Joan Esteban, 2002. "A Theory of Endogenous Sentiments," Discussion Papers 02-11, University at Albany, SUNY, Department of Economics.
    2. Oded Stark & Ita Falk, 2000. "Transfers, Empathy Formation, and Reverse Transfers," International Economic Association Series, in: L.-A. Gérard-Varet & S.-C. Kolm & J. Mercier Ythier (ed.), The Economics of Reciprocity, Giving and Altruism, chapter 8, pages 174-181, Palgrave Macmillan.
    3. Hernán Bejarano & Joris Gillet & Ismael Rodriguez‐Lara, 2018. "Do Negative Random Shocks Affect Trust and Trustworthiness?," Southern Economic Journal, John Wiley & Sons, vol. 85(2), pages 563-579, October.
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    5. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    6. Cervellati, Matteo & Esteban, Joan & Kranich, Laurence, 2010. "Work values, endogenous sentiments redistribution," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 612-627, October.
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    More about this item

    Keywords

    Altruism; reciprocity; inter vivos transfers;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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