Applications by Serge-Christophe Kolm and Jean Mercier Ythier (Eds.)

By Serge-Christophe Kolm and Jean Mercier Ythier (Eds.)

The guide at the Economics of Giving, Reciprocity and Altruism presents a complete set of experiences of literature at the economics of nonmarket voluntary transfers. the rules of the sphere are reviewed first, with a chain of chapters that current the difficult middle of the theoretical and empirical analyses of giving, reciprocity and altruism in economics, interpreting their relatives with the viewpoints of ethical philosophy, psychology, sociobiology, sociology and fiscal anthropology. Secondly, a finished set of functions are thought of of all of the facets of society the place nonmarket voluntary transfers are major: kin and intergenerational transfers; charity and charitable associations; the nonprofit financial system; interpersonal family within the office; the Welfare country; and foreign reduction.

*Every quantity includes contributions from major researchers
*Each instruction manual offers a correct, self-contained survey of a specific subject
*The sequence offers accomplished and available surveys

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Suppose that the giver is paying a service, at the current wage rate, and consider a tax on the young, that diminishes his net wage, to the benefit of the old generation: the donor parent may now compensate the beneficiary child at a lower rate. 4. If the parent transfer is negatively related to the child’s income, the relationship may be either altruistic or one of reciprocity or exchange. 69 For dynamic models of collective choices, see Ligon (2002). Ch. 13: Microeconomic models of family transfers 933 Table 4 Main assumptions and results of the pure and impure altruism models One sided altruism Parent’s utility and [information set] Child’s utility Pure altruism, one good, exogenous incomes Up = U (Cp , V (Ck )) Uk = V (Ck ) Vc > 0 Uc > 0, Uv > 0 ∂T ∂T [Yp , Yk , V ] ∂Y − ∂Y = 1 p k Redistributive neutrality Budget constraints Cp = Yp − T , T ≥ 0 C k = Yk + T After exogenous shock on exogenous incomes Pure altruism, two goods, one non-produced, endogenous child’s income [Villanueva (2001)] Up = U (Cp , V (Ck , e)) Uk = V (Ck , e) C p = Yp − T , T ≥ 0 Uc > 0, Uv > 0 Ve < 0, Vc > 0 Ck = Yk + wk e + T , e ≥ 0 Redistributive neutrality May not hold [Yp , Yk , V , wk e] (endogenous income) Pure altruism, two goods, one non-produced, endogenous parent’s income [Sloan et al.

There is a natural development of the market at the expense of non-market activities as people become better off. From barter to money, from family help to salaried services, from village loans to sophisticated credit system, the progress and progression seem inevitable. 46 Besides the development of leisure time could lead to a revival of the exchange of non-produced goods. 47 But they may find it mutually beneficial to ‘trade’. 2. Buying or extorting the child’s services or the parent’s inheritance The parent’s utility remains the same as in (38), replacing e with S, but the child’s budget constraint is the same as in (3), the effort/service level does not enter it.

13: Microeconomic models of family transfers 915 or down-payment on a home (see also Pollak, 1988). 1, does the child react to the transfer, but the parents want a particular reaction. Such reflections naturally lead to leave pure altruism (assumptions A2, A4) for impure altruism or the endogenous formation of altruism (section 3). Before that, let us summarize the main results of section 2. 1. Redistributive neutrality: providing parent and child are linked by positive transfers, redistributing at the margin income from parent to child or from child to parent is neutralized by a family transfer in the opposite direction, under pure altruism.

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