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In nitely-lived agents via two-sided altruism

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  • Seghir, Abdelkrim
  • Salem, Sherif

Abstract

In an incomplete market with two sided altruistic agents and default.We show equilibrium existence if members of a dynasty act in an individualistic way by maximizing their own intergenerational utility functions. We also illustrate that a dynasty may end doing Ponzi schemes if its members act in a collectivistic way by maximizing a dynasty's collectivistic utility. We also prove that Ponzi schemes are ruled out and equilibrium existence is restored if there exist, always in the future, some agents who are not too altruistic either towards their parents or their ospring.

Suggested Citation

  • Seghir, Abdelkrim & Salem, Sherif, 2010. "In nitely-lived agents via two-sided altruism," MPRA Paper 31379, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:31379
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    File URL: https://mpra.ub.uni-muenchen.de/31828/1/MPRA_paper_31828.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Innitely-Lived Agents; Two-Sided Altruism; Individualistic Equilibrium; Collectivstic Equilibrium.;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets

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