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Private transfers with incomplete information: A contribution to the "altruism-exchange motivation for transfers" debate


  • Eli Feinerman

    () (The Department of Agricultural Economics and Management, The Hebrew University of Jerusalem, P.O. Box 12, Rehovot 76100, Israel)

  • Edward J. Seiler

    () (Bates White and Ballentine, LLC, 2001 K Street, Washington, DC 20005, USA)


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.

Suggested Citation

  • Eli Feinerman & Edward J. Seiler, 2002. "Private transfers with incomplete information: A contribution to the "altruism-exchange motivation for transfers" debate," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(4), pages 715-736.
  • Handle: RePEc:spr:jopoec:v:15:y:2002:i:4:p:715-736 Note: Received: 19 November 2000/Accepted: 17 May 2001

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    References listed on IDEAS

    1. S. Rao Aiyagari & Jeremy Greenwood & Nezih Guner, 2000. "On the State of the Union," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 213-244, April.
    2. Jeremy Greenwood & Nezih Guner & John A. Knowles, 2003. "More on Marriage, Fertility, and the Distribution of Income," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(3), pages 827-862, August.
    3. Andres Erosa & Luisa Fuster & Diego Restuccia, 2010. "A General Equilibrium Analysis of Parental Leave Policies," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(4), pages 742-758, October.
    4. Ruhm, Christopher J., 2000. "Parental leave and child health," Journal of Health Economics, Elsevier, vol. 19(6), pages 931-960, November.
    5. Raquel Bernal & Michael P. Keane, 2011. "Child Care Choices and Children's Cognitive Achievement: The Case of Single Mothers," Journal of Labor Economics, University of Chicago Press, vol. 29(3), pages 459-512.
    6. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters,in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 257-298 National Bureau of Economic Research, Inc.
    7. Raquel Bernal, 2008. "The Effect Of Maternal Employment And Child Care On Children'S Cognitive Development," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1173-1209, November.
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    Cited by:

    1. Wolff, Francois-Charles, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
    2. Diego Alberto Sandoval Herrera & María Fernanda Reyes Roa, 2012. "¿Por qué los migrantes envían remesas?: Repaso de las principales motivaciones microeconómicas," BORRADORES DE ECONOMIA 010036, BANCO DE LA REPÚBLICA.
    3. Ibrahim Sirkeci & Jeffrey H. Cohen & Dilip Ratha, 2012. "Migration and Remittances during the Global Financial Crisis and Beyond," World Bank Publications, The World Bank, number 13092.
    4. Jellal, Mohamed, 2014. "A theory of family education incentives and inequality," MPRA Paper 57913, University Library of Munich, Germany.
    5. Jellal, Mohamed, 2009. "A Theory of Educational Inequality Family and Agency Costs," MPRA Paper 17434, University Library of Munich, Germany.

    More about this item


    Intergenerational transfers; mechanism design; altruism; exchange;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth


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