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Leaving home as a self-selection device

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  • Jellal, Mohamed
  • Wolff, François Charles

Abstract

We develop a model of intergeneratioal coresidence and transfers within the family in a setting of asymmetric information. Following an exchange motive altruistic parents receive services from their children, who may make them financial gifts in return. However, parents do not know the privacyc ost to children of home-sharing .Hence they make additional transfers in order to discipline their children and give them incentives to reveal their true privacy cost. We show that only children who stay at the parental home receive an informational rent, and that this rent is greaterf or recipients with a low privacy cost.

Suggested Citation

  • Jellal, Mohamed & Wolff, François Charles, 2003. "Leaving home as a self-selection device," MPRA Paper 38528, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:38528
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    References listed on IDEAS

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    Cited by:

    1. Wolff, Francois-Charles & Laferrere, Anne, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 13, pages 889-969, Elsevier.
    2. Jellal, Mohamed, 2009. "Family Capitalism Corporate Governance Theory," MPRA Paper 17886, University Library of Munich, Germany.
    3. Jellal, Mohamed, 2014. "A theory of family education incentives and inequality," MPRA Paper 57913, University Library of Munich, Germany.
    4. Jellal, Mohamed, 2009. "A Theory of Educational Inequality Family and Agency Costs," MPRA Paper 17434, University Library of Munich, Germany.

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    More about this item

    Keywords

    Family Exchanges; Transfers; Information; Co-residence;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D1 - Microeconomics - - Household Behavior

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