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Optimal transfer policies

  • Stähler, Frank

This paper discusses the role of transfers in a non-cooperative environment. If reselling in-kind-transfers involves some retrading costs, in-kind transfers are supposed to realise at least some of the mutual bargaining gains which would be left unexploited by mere use of monetary payments. These retrading costs bias the recipient's consumption plans in favour of the donor. However, the paper shows that non-enforceability alone does not support the exclusive application of inkind transfers in general because income effects can leave some scope for monetary transfers. The results of the model are discussed for some applications.

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File URL: http://econstor.eu/bitstream/10419/46761/1/257486712.pdf
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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 702.

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Date of creation: 1995
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Handle: RePEc:kie:kieliw:702
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  1. Garfinkel, Irwin, 1973. "Is In-Kind Redistribution Efficient?," The Quarterly Journal of Economics, MIT Press, vol. 87(2), pages 320-30, May.
  2. Neil Bruce & Michael Waldman, 1988. "Transfers in Kind: Why They Can Be Efficient and Non-Paternalistic," UCLA Economics Working Papers 532, UCLA Department of Economics.
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