Family ties, incentives and development: A model of coerced altruism
AbstractWe analyze the effects of family ties on the incentives for production of effort, where family ties are defined as a mixture of true and coerced altruism between family members. We model families as pairs of siblings. Each sibling exerts effort in order to obtain output under uncertainty. A social norm dictates that a sibling with a high output must share a specified amount of this output with his sibling, if the latter is output is low. Siblings may be truly altruistic towards each other, but not to a larger degree than dictated by the social norm. We compare such informal family insurance with actuarially fair formal insurance.
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Bibliographic InfoPaper provided by Carleton University, Department of Economics in its series Carleton Economic Papers with number 07-10.
Length: 33 pages
Date of creation: 24 Oct 2007
Date of revision: 2008
Publication status: Published: Revised version in Arguments for a Better World: Essays in Honor of Amartya Sen, Volume II: Society, Institutions, and Development, ed. Kaushik Basu and Ravi Kanburn, Oxford University Press, 2008
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Other versions of this item:
- Alger, Ingela & Weibull, Jörgen, 2007. "Family ties, incentives and development: a model of coerced altruism," Working Paper Series in Economics and Finance 681, Stockholm School of Economics.
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
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