Governmental Transfers and Altruistic Private Transfers
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.
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- Stefan Hochguertel & Henry Ohlsson, 2009. "Compensatory inter vivos gifts," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(6), pages 993-1023.
- McGarry, K & Schoeni, R-F, 1996. "Measurement and the Redistribution of Resources Within the Family," Papers 96-11, RAND - Reprint Series.
- Homburg, Stefan, 2000. "Compulsory savings in the welfare state," Journal of Public Economics, Elsevier, vol. 77(2), pages 233-239, August.
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