Kinship, incentives, and evolution
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
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.
Economics and Business
IdentifiersURN: urn:nbn:se:kth:diva-86663DOI: 10.1257/aer.100.4.1725ISI: 000281911400016OAI: oai:DiVA.org:kth-86663DiVA: diva2:500908
QC 201202142012-02-132012-02-132012-02-14Bibliographically approved