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Private transfers with incomplete information: A contribution to the "altruism-exchange motivation for transfers" debate

Author

Listed:
  • Eli Feinerman

    (The Department of Agricultural Economics and Management, The Hebrew University of Jerusalem, P.O. Box 12, Rehovot 76100, Israel)

  • Edward J. Seiler

    (Bates White and Ballentine, LLC, 2001 K Street, Washington, DC 20005, USA)

Abstract

We examine the role of altruism in determining optimal transfers from a principal (a mother) to selfish agents (her children) in return for attention services. Transfer-attention contracts are studied in a setting in which informational asymmetries arise from the inability of a parent to determine the extent of her children's selfishness. We find a predominating exchange motive for transfers in the symmetric informational regime we study. However, both altruism and exchange are important motives under asymmetric information. We show that altruism facilitates transfer-attention exchange arrangements with certain trade partners under incomplete information, but diminishes trade with others.

Suggested Citation

  • Eli Feinerman & Edward J. Seiler, 2002. "Private transfers with incomplete information: A contribution to the "altruism-exchange motivation for transfers" debate," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(4), pages 715-736.
    • Handle: RePEc:spr:jopoec:v:15:y:2002:i:4:p:715-736
    Note: Received: 19 November 2000/Accepted: 17 May 2001
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    Citations

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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, 2014. "A theory of family education incentives and inequality," MPRA Paper 57913, University Library of Munich, Germany.
    3. Diego Alberto Sandoval Herrera & María Fernanda Reyes Roa, 2012. "¿Por qué los migrantes envían remesas?: Repaso de las principales motivaciones microeconómicas," Borradores de Economia 10036, Banco de la Republica.
    4. Rydell, Ingrid, 2005. "Equity, Justice, Interdependence: Intergenerational Transfers and the Ageing Population," Arbetsrapport 2005:5, Institute for Futures Studies.
    5. B. Gabriela Mundaca, 2009. "Remittances, Financial Market Development, and Economic Growth: The Case of Latin America and the Caribbean," Review of Development Economics, Wiley Blackwell, vol. 13(2), pages 288-303, May.
    6. Ibrahim Sirkeci & Jeffrey H. Cohen & Dilip Ratha, 2012. "Migration and Remittances during the Global Financial Crisis and Beyond," World Bank Publications - Books, The World Bank Group, number 13092.
    7. Jellal, Mohamed, 2009. "A Theory of Educational Inequality Family and Agency Costs," MPRA Paper 17434, University Library of Munich, Germany.
    8. Julie Zissimopoulos & Johanna Thunell & Stipica Mudrazija, 2020. "Parental Income and Wealth Loss and Transfers to Their Young Adult Children," Journal of Family and Economic Issues, Springer, vol. 41(2), pages 316-331, June.
    9. Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," 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 17, pages 1135-1198, Elsevier.
    10. Al-Mashat Rania & Billmeier Andreas, 2012. "Push or Pull? The Determinants of Remittances to Egypt," Review of Middle East Economics and Finance, De Gruyter, vol. 8(2), pages 1-27, October.

    More about this item

    Keywords

    Intergenerational transfers; mechanism design; altruism; exchange;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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