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The Rotten-Kid Theorem Meets the Samaritan's Dilemma

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  • Neil Bruce
  • Michael Waldman

Abstract

Becker derives the Rotten-Kid theorem -- that a child will not behave in a manner which lowers the parent's income more than it raises the child's -- in a one period setting. Not captured in Becker's analysis is that the family environment can exhibit what others refer to as the Samaritan's Dilemma. That is, children may consume too much in early periods because by doing so they can increase the income transfers they receive in later periods. In this paper we formally consider the Samaritan's Dilemma and its relation to the Rotten-Kid Theorem in a two period version of Becker's model.

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Bibliographic Info

Paper provided by Queen's University, Department of Economics in its series Working Papers with number 650.

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Length: 22 pages
Date of creation: 1986
Date of revision:
Handle: RePEc:qed:wpaper:650

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  1. Shleifer, Andrei & Summers, Lawrence H. & Bernheim, B. Douglas, 1986. "The Strategic Bequest Motive," Scholarly Articles 3721794, Harvard University Department of Economics.
  2. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
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