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Incomplete Information in the Samaritan's Dilemma: The Dilemma (Almost) Vanishes

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  • Johan Lagerlöf

Abstract

Suppose an altruistic person, A, is willing to transfer resources to a second person, B, if B comes upon hard times. If B anticipates that A will act in this manner, B will save too little from both agents' point of view. This is the Samaritan's dilemma. The mechanism in the dilemma has been employed in an extensive literature, addressing a wide range of both normative and positive issues. However, this paper shows that the undersaving result is not robust to the assumption that information is complete: by adding a slight amount of uncertainty one can sustain an equilibrium outcome that is arbitrarily close to ex post incentive efficiency. One may also sustain outcomes with oversaving. ZUSAMMENFASSUNG - (Unvollständige Information im Fall des Samariter-Dilemmas: Das Dilemma verschwindet (meist)) Angenommen eine altruistische Person A ist bereit, Ressourcen einer zweiten Person B zu übertragen, wenn für B schwierige Zeiten anbrechen. Wenn B antizipiert, daß A in dieser Weise handeln wird, dann wird B wenig sparen und zwar aus der Sicht beider Agenten. Dieses Phänomen wird als Samariter-Dilemma bezeichnet. Die Mechanismen, die dabei wirken, wurden in der Literatur sowohl auf einer normativen als auch empirischen Ebene ausgiebig diskutiert. In diesem Beitrag wird jedoch gezeigt, daß das Ergebnis des .Untersparens. im Hinblick auf die Annahme unvollständiger Information nicht robust ist. Bei Berücksichtigung eines geringen Maßes an Unsicherheit stellt sich ein Gleichgewichtsergebnis ein, das nahe der Ex-post-Anreizeffizienz liegt. Man kann aber auch Ergebnisse mit dem .Übersparen. erhalten.

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Bibliographic Info

Paper provided by Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG) in its series CIG Working Papers with number FS IV 99-12.

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Length: 39 pages
Date of creation: Sep 1999
Date of revision: Jun 2002
Publication status: Published as "Efficiency-Enhancing Signalling in the Samaritan's Dilemma" in Economic Journal , Vol. 114(492), 2004, pp. 55-68.
Handle: RePEc:wzb:wzebiv:fsiv99-12

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  1. O'Connell, Stephen A. & Zeldes, Stephen P., 1993. "Dynamic efficiency in the gifts economy," Journal of Monetary Economics, Elsevier, vol. 31(3), pages 363-379, June.
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  6. Bruce, Neil & Waldman, Michael, 1990. "The Rotten-Kid Theorem Meets the Samaritan's Dilemma," The Quarterly Journal of Economics, MIT Press, vol. 105(1), pages 155-65, February.
  7. Becker, Gary S & Murphy, Kevin M, 1988. "The Family and the State," Journal of Law and Economics, University of Chicago Press, vol. 31(1), pages 1-18, April.
  8. Neil Bruce & Michael Waldman, 1988. "Transfers in Kind: Why They Can Be Efficient and Non-Paternalistic," UCLA Economics Working Papers 532, UCLA Department of Economics.
  9. Bergstrom, Theodore C, 1989. "A Fresh Look at the Rotten Kid Theorem--and Other Household Mysteries," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1138-59, October.
  10. Chakrabarti, Subir & Lord, William & Rangazas, Peter, 1993. "Uncertain Altruism and Investment in Children," American Economic Review, American Economic Association, vol. 83(4), pages 994-1002, September.
  11. Bernheim, B Douglas & Stark, Oded, 1988. "Altruism within the Family Reconsidered: Do Nice Guys Finish Last?," American Economic Review, American Economic Association, vol. 78(5), pages 1034-45, December.
  12. Bengt Holmstrom & Roger B. Myerson, 1981. "Efficient and Durable Decision Rules with Incomplete Information," Discussion Papers 495, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  13. Lindbeck, Assar & Weibull, Jorgen W, 1988. "Altruism and Time Consistency: The Economics of Fait Accompli," Journal of Political Economy, University of Chicago Press, vol. 96(6), pages 1165-82, December.
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