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The stability of intergenerational cooperation in altruistic families

Author

Listed:
  • Jose Alberto Molina

    (University of Zaragoza and IZA)

  • Iñaki Vazquez

    (University of Zaragoza)

  • Joaquín Andaluz

    (University of Zaragoza)

Abstract

This paper analyses the stability of bargaining solutions in a family consisting of two parents and one adult child, by developing a non-cooperative family game. Assuming different bargaining powers between parents and the child, we find that the greater bargaining power of the parents allows them to take greater gains from the cooperation, and reduce the incentives to deviate from the cooperative agreement. The presence of altruism between the players will significantly reduce the probability that there will be incentives to break the cooperative agreement. A higher level of altruism increases the stability of cooperation, and will overcome the contrary effect of other factors.

Suggested Citation

  • Jose Alberto Molina & Iñaki Vazquez & Joaquín Andaluz, 2007. "The stability of intergenerational cooperation in altruistic families," Economics Bulletin, AccessEcon, vol. 3(39), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-07c70012
    as

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    References listed on IDEAS

    as
    1. Andaluz, Joaquin & Molina, Jose Alberto, 2007. "How do altruistic parental transfers affect the welfare gains of marriage?," Research in Economics, Elsevier, vol. 61(1), pages 1-9, March.
    2. Lundberg, Shelly & Pollak, Robert A, 1994. "Noncooperative Bargaining Models of Marriage," American Economic Review, American Economic Association, vol. 84(2), pages 132-137, May.
    3. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December.
    4. Shelly Lundberg & Robert Pollak, 2003. "Efficiency in Marriage," Review of Economics of the Household, Springer, vol. 1(3), pages 153-167, September.
    5. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-349, June.
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    Cited by:

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    2. Ferrando-Latorre, Sandra, 2017. "Risky consumption and intergenerational mobility: a research program in a family context," MPRA Paper 79777, University Library of Munich, Germany.
    3. Boldova, Daniel Miguel, 2019. "Efectos económicos de las leyes sobre la estructura familiar: Evidencia internacional del divorcio y la custodia [Economic effects of family structure laws: International evidence of divorce and cu," MPRA Paper 96440, University Library of Munich, Germany.
    4. García, Lucia & Molina, José Alberto, 2017. "The household structure: recent international evolution," MPRA Paper 82049, University Library of Munich, Germany.
    5. Lopez Tris, Carlos Javier, 2020. "Evidencia socioeconómica del abandono escolar en Europa [Socioeconomic evidence of early school leaving in Europe]," MPRA Paper 98124, University Library of Munich, Germany.
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    7. Bellido, Héctor, 2020. "La transición del sistema educativo al mercado laboral en Europa: Efectos del abandono escolar en la incorporación al trabajo de los jóvenes europeos [The transition from the education system to th," MPRA Paper 103071, University Library of Munich, Germany.

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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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