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The fetters of the sib: Weber meets Darwin

  • Ingela Alger

    (Carleton University)

  • Jörgen Weibull

    (SSE - Department of Economics - Stockholm School of Economics, Department of Economics, Ecole Polytechnique - Polytechnique - X - CNRS)

We analyze how family ties affect incentives, with focus on the strategic interaction between a pair of mutually altruistic siblings. Each sibling exerts effort to produce output under uncertainty and the siblings may transfer output to each other. With equally altruistic siblings, their equilibrium effort is nonmonotonic in the common degree of altruism and depends on the harshness of the environment. We define a notion of local evolutionary robustness of degrees of sibling altruism, and show that this degree is less than one half, the kinship relatedness factor. By way of numerical simulations we show that family ties are weaker in harsher environments.

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Date of creation: Sep 2008
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Handle: RePEc:hal:wpaper:hal-00354241
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