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Governmental Transfers and Altruistic Private Transfers

Author

Listed:
  • Amihai Glazer

    () (Department of Economics, University of California-Irvine)

  • Hiroki Kondo

    (Department of Economics, Sophia University)

Abstract

An altruistic agent who may aid a person with a low income may induce that person to exert little effort to increase his income. Such behavior generates a Good Samaritan Dilemma, in which welfare is lower than when no one is altruistic. Governmental transfers, which restrict reallocation from a person who saves much to one who saves little, reduce the effect, and can lead to an outcome which is Pareto-superior to the outcome under a Nash equilibrium with no government taxation and transfers.

Suggested Citation

  • Amihai Glazer & Hiroki Kondo, 2012. "Governmental Transfers and Altruistic Private Transfers," Working Papers 111209, University of California-Irvine, Department of Economics.
  • Handle: RePEc:irv:wpaper:111209
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    File URL: https://www.economics.uci.edu/files/docs/workingpapers/2011-2012/glazer-09.pdf
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    References listed on IDEAS

    as
    1. Homburg, Stefan, 2000. "Compulsory savings in the welfare state," Journal of Public Economics, Elsevier, vol. 77(2), pages 233-239, August.
    2. Stefan Hochguertel & Henry Ohlsson, 2009. "Compensatory inter vivos gifts," Journal of Applied Econometrics, John Wiley & Sons, Ltd., pages 993-1023.
    3. Rene van den Brink & Rene Levinsky & Miroslav Zeleny, 2007. "The balanced solution for cooperative transferable utility games," Jena Economic Research Papers 2007-073, Friedrich-Schiller-University Jena.
    4. McGarry, K & Schoeni, R-F, 1996. "Measurement and the Redistribution of Resources Within the Family," Papers 96-11, RAND - Reprint Series.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Social security; Moral hazard; Savings; Altruism;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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