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Altruism and welfare when preferences are endogenous

Author

Listed:
  • Anders Poulsen

    (University of East Anglia)

  • Odile Poulsen

    (University of East Anglia)

Abstract

We study whether an altruistic preference can survive in competition with other preferences and investigate the relationship between the equilibrium proportion of altruism and equilibrium material and subjective welfare. Altruism survives whenever preferences are sufficiently observable. Altruism can co-exist with reciprocal and materialistic preferences. Any policy that increases the equilibrium proportion of altruism raises economic prosperity but can reduce some people's subjective equilibrium welfare. Some of the policies that increase the equilibrium proportion of altruism are, at first sight at least, counter-intuitive. There can be a non-monotonic relationship between the degree of anonymity of interaction in society (the probability that an individual knows other people's preferences) in society and welfare.

Suggested Citation

  • Anders Poulsen & Odile Poulsen, 2009. "Altruism and welfare when preferences are endogenous," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 09-02, School of Economics, University of East Anglia, Norwich, UK..
  • Handle: RePEc:uea:wcbess:09-02
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    References listed on IDEAS

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    More about this item

    Keywords

    altriusm; endogenous preferences; material and subjective welfare; indirect evoluationary approach;

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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