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The Rotten-Kid Theorem Meets the Samaritan's Dilemma

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  • Neil Bruce

    (Queens University)

  • Michael Waldman

    (UCLA)

Abstract

A familiar result in the economic theory of the family is Becker's rotten-kid theorem. This theorem states that altruism by a family member will lead other selfish members to act efficiently from the family viewpoint. The authors extend Becker's one-period model to two periods and show that parental altruism can result in an inefficiency known in other contexts as the Samaritan's dilemma. Implications of this for transfer arrangements within the family and for the Ricardian equivalence theorem are drawn. Copyright 1990, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Paper provided by UCLA Department of Economics in its series UCLA Economics Working Papers with number 402.

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Date of creation: 01 May 1986
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Handle: RePEc:cla:uclawp:402

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Web page: http://www.econ.ucla.edu/

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  1. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986. "The Strategic Bequest Motive," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages S151-82, July.
  2. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-93, Nov.-Dec..
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