Private transfers with incomplete information: A contribution to the "altruism-exchange motivation for transfers" debate
We examine the role of altruism in determining optimal transfers from a principal (a mother) to selfish agents (her children) in return for attention services. Transfer-attention contracts are studied in a setting in which informational asymmetries arise from the inability of a parent to determine the extent of her children's selfishness. We find a predominating exchange motive for transfers in the symmetric informational regime we study. However, both altruism and exchange are important motives under asymmetric information. We show that altruism facilitates transfer-attention exchange arrangements with certain trade partners under incomplete information, but diminishes trade with others.
Volume (Year): 15 (2002)
Issue (Month): 4 ()
|Note:||Received: 19 November 2000/Accepted: 17 May 2001|
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