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Kinship, incentives, and evolution
KTH, School of Engineering Sciences (SCI), Mathematics (Dept.).
2010 (English)In: The American Economic Review, ISSN 0002-8282, E-ISSN 1944-7981, Vol. 100, no 4, 1725-1758 p.Article in journal (Refereed) Published
Abstract [en]

We analyze how family ties affect incentives, with focus on the strategic interaction between two mutually altruistic siblings. The siblings exert effort to produce output under uncertainty, and they may transfer output to each other. With equally altruistic siblings, their equilibrium effort is nonmonotonic in the common degree of altruism, and it depends on the harshness of the environment. We define a notion of local evolutionary stability of degrees of sibling altruism and show that this degree is lower than the kinship-relatedness factor. Numerical simulations show how family ties vary with the environment, and how this affects economic outcomes.

Place, publisher, year, edition, pages
2010. Vol. 100, no 4, 1725-1758 p.
National Category
Economics and Business
URN: urn:nbn:se:kth:diva-86663DOI: 10.1257/aer.100.4.1725ISI: 000281911400016OAI: diva2:500908
QC 20120214Available from: 2012-02-13 Created: 2012-02-13 Last updated: 2012-02-14Bibliographically approved

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Weibull, Jörgen
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