The Rotten-Kid Theorem Meets the Samaritan's Dilemma
Becker derives the Rotten-Kid theorem -- that a child will not behave in a manner which lowers the parent's income more than it raises the child's -- in a one period setting. Not captured in Becker's analysis is that the family environment can exhibit what others refer to as the Samaritan's Dilemma. That is, children may consume too much in early periods because by doing so they can increase the income transfers they receive in later periods. In this paper we formally consider the Samaritan's Dilemma and its relation to the Rotten-Kid Theorem in a two period version of Becker's model.
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- Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1985.
"The Strategic Bequest Motive,"
Journal of Political Economy,
University of Chicago Press, vol. 93(6), pages 1045-76, December.
- Gary S. Becker, 1974.
"A Theory of Social Interactions,"
NBER Working Papers
0042, National Bureau of Economic Research, Inc.
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