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 optimal choice of altruistic parents is compensatory gifts and equal bequests.
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Bibliographic InfoPaper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 1999:3.
Length: 6 pages
Date of creation: 10 Jan 1999
Date of revision:
Publication status: Published in Economics Letters, 2000, pages 165-171.
Contact details of provider:
Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
More information through EDIRC
altruism; bequests; inheritances; gifts; equal division; post mortem reputation; social norm; information;
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, M. & Ohlsson, H., 1999. "Post Mortem Reputation, Compensatory Gifts and Equal Bequests," Papers 1999:3, Uppsala - Working Paper Series.
- 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
This paper has been announced in the following NEP Reports:
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- CREMER, Helmuth & PESTIAU, Pierre, 1993. "Bequests as a heir : "Discipline device"," CORE Discussion Papers 1993041, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Laitner, John, 1993. "Intergenerational and interhousehold economic links," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 5, pages 189-238 Elsevier.
- Dunn, Thomas A. & Phillips, John W., 1997. "The timing and division of parental transfers to children," Economics Letters, Elsevier, vol. 54(2), pages 135-137, February.
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