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Optimal Timing in Rotten Kid Families

Author

Listed:
  • João Ricardo Faria
  • Emilson C.D. Silva

Abstract

In a family context with endogenous timing, multiple public goods and alternative parental instruments, we show that the optimal timing for the sequential-action game played by rotten kids and a parent depends crucially on whether the kids are homogeneous or heterogeneous. For homogeneous kids, the rotten kid theorem holds irrespective of the parental policy instrument, implying that it is optimal to let the kids to be action leaders. If the kids are heterogeneous, however, parental leadership yields a first best outcome and, hence, it is optimal whenever the kids are economically dependent and agree on the tradeoff between public goods.

Suggested Citation

  • João Ricardo Faria & Emilson C.D. Silva, 2017. "Optimal Timing in Rotten Kid Families," CESifo Working Paper Series 6333, CESifo.
  • Handle: RePEc:ces:ceswps:_6333
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    References listed on IDEAS

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    More about this item

    Keywords

    rotten kids; public goods; endogenous timing; heterogeneous preferences; economically dependent;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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