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The Organization Of Family Interactions: Minimizing Transaction Costs And Strategic Behavior

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  • Wittman, Donald

Abstract

The optimal organization of the family requires that relations are structured so that non-cooperative game playing is minimized and transaction costs are reduced. I show that therapeutic advice for behavior within the family is to create a functioning property rights system. Punishment is shown to be inferior to setting limits because the first encourages strategic game playing. I show why there is conflict between parent and their child even when the parent maximizes the child’s expected discounted utility. In addition, I provide a model of the intergenerational transfer of behavior.

Suggested Citation

  • Wittman, Donald, 2005. "The Organization Of Family Interactions: Minimizing Transaction Costs And Strategic Behavior," Santa Cruz Department of Economics, Working Paper Series qt9xg179zp, Department of Economics, UC Santa Cruz.
  • Handle: RePEc:cdl:ucscec:qt9xg179zp
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    References listed on IDEAS

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