Post Mortem Reputation, Compensatory Gifts and Equal Bequests
AbstractThe empirical evidence suggests that parents use inter vivos gifts (i.e., transfers of tangible and financial property) to compensate less well off children whereas post mortem bequests are divided equally among siblings. We study a theoretical model assuming, first, that the amounts given is private information, only known to the donor and the donee, while the amounts bequeathed is public information. Second, we assume that parents care about the reputation that their bequest behavior will leave them after their death. More specifically, this reputation is deteriorating in the difference in amounts inherited. We show that, given these assumptions, the optimal choice of altruistic parents is compensatory gifts and equal bequests.
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Bibliographic InfoPaper provided by Uppsala - Working Paper Series in its series Papers with number 1999:3.
Length: 6 pages
Date of creation: 1999
Date of revision:
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INHERITANCE ; INFORMATION ; ALTRUISM;
Other versions of this item:
- Lundholm, Michael & Ohlsson, Henry, 2000. "Post mortem reputation, compensatory gifts and equal bequests," Economics Letters, Elsevier, vol. 68(2), pages 165-171, August.
- Lundholm, Michael & Ohlsson, Henry, 1999. "Post Mortem Reputation, Compensatory Gifts and Equal Bequests," Working Paper Series 1999:3, Uppsala University, Department of Economics.
- Lundholm, Michael & Ohlsson, Henry, 1999. "Post Mortem Reputation, Compensatory Gifts and Equal Bequests," Research Papers in Economics 1999:1, Stockholm University, Department of Economics.
- D10 - Microeconomics - - Household Behavior - - - General
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
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