RT Journal Article
T1 Altruistically motivated transfers under uncertainty
A1 Barczyk, Daniel
A1 Kredler, Matthias
AB How do families behave dynamically? We provide a framework for studying economic problems in which family behavior is essential. Our key innovation is the inclusion of imperfectly altruistic agents in an otherwise standard consumption-savings problem with exogenous income risk. This gives rise to altruistic transfers and strategic behavior in the consumption&-savings decision. We study the Markov-perfect equilibrium that arises from the limit of equilibria in a sequence of finite games. The equilibrium's transfer patterns are empirically plausible. Furthermore, agents overconsume relative to the social optimum. In contrast to two-period models, both the richer and the poorer players overconsume long before transfers actually occur. The poorer agent also faces incentives to engage in excessive risk-taking because losses from a gamble are absorbed by both while gains are enjoyed alone.
PB John Wiley & Sons, Inc.
SN 1759-7323
YR 2014
FD 2014-11-01
LK https://hdl.handle.net/10016/35319
UL https://hdl.handle.net/10016/35319
LA eng
DS e-Archivo
RD 2 may. 2024