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Sibling Rivalry and Strategic Parental Transfers

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  • Yang‐Ming Chang
  • Dennis L. Weisman

Abstract

This paper develops a noncooperative Nash model in which two siblings compete for their parents' financial transfers. Treating sibling rivalry as a “rent‐seeking contest” and using a Tullock‐Skaperdas contest success function, we derive the conditions under which more financial resources are transferred to the sibling with lower earnings. We find that parental transfers are compensatory and that the family as an institution serves as an “income equalizer.” Within a sequential game framework, we characterize the endogeneity of parental transfers and link it to parents' income, altruism, and children's supply of merit goods (e.g., parent‐child companionship or child services). We show that merit goods are subject to a “moral hazard” problem from the parents' perspective.

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  • Yang‐Ming Chang & Dennis L. Weisman, 2005. "Sibling Rivalry and Strategic Parental Transfers," Southern Economic Journal, John Wiley & Sons, vol. 71(4), pages 821-836, April.
    • Handle: RePEc:wly:soecon:v:71:y:2005:i:4:p:821-836
    DOI: 10.1002/j.2325-8012.2005.tb00678.x
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    1. Akira Yakita, 2020. "Fertility decisions of families in an intergenerational exchange model," Review of Development Economics, Wiley Blackwell, vol. 24(4), pages 1447-1462, November.

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