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Family ties, incentives and development: A model of coerced altruism

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Author Info
Ingela Alger () (Department of Economics, Carleton University)
Jörgen W. Weibull () (Department of Economics, Stockholm School of Economics)

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Abstract

We 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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File URL: http://www2.carleton.ca/economics/research/working-papers/carleton-economic-papers-cep/
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Publisher Info
Paper provided by Carleton University, Department of Economics in its series Carleton Economic Papers with number 07-10.

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Length: 33 pages
Date of creation: 24 Oct 2007
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Publication status: Published: Carleton Economic Paper
Handle: RePEc:car:carecp:07-10

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Related research
Keywords: altruism; coerced altruism; family ties; insurance; moral hazard.;

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Find related papers by JEL classification:
D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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  16. Ingela Alger & Jörgen W. Weibul, 2007. "Kinship, Incentives and Evolution," Carleton Economic Papers 07-13, Carleton University, Department of Economics. [Downloadable!]
  17. Jean-Paul Azam & Flore Gubert, 2002. "Those in Kayes. The impact of remittances on their recipients in Africa," Working Papers DT/2002/11, DIAL (Développement, Institutions & Analyses de Long terme). [Downloadable!]
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  18. Wolff, Francois-Charles, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alger, Ingela & Weibull, Jörgen, 2007. "The Fetters of the Sib: Weber Meets Darwin," Working Paper Series in Economics and Finance 682, Stockholm School of Economics. [Downloadable!]
    Other versions:
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