Rotten spouses, family transfers, and public goods

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• 作者：Helmuth Cremer ; Kerstin Roeder
• 关键词：Rotten kids ; Altruism ; Private provision of public good ; Subgame perfect equilibrium ; Family aid
• 刊名：Journal of Population Economics
• 出版年：2017
• 出版时间：January 2017
• 年：2017
• 卷：30
• 期：1
• 页码：141-161
• 全文大小：480 KB
• 刊物主题：Population Economics; Labor Economics; Demography; Social Policy;
• 出版者：Springer Berlin Heidelberg
• ISSN：1432-1475
• 卷排序：30

文摘

We show that once interfamily exchanges are considered, Becker’s rotten kids mechanism has some remarkable, hitherto unnoticed, implications. Specifically, Cornes and Silva’s (J Polit Econ 107(5):1034–1040, 1999) result of efficiency in the contribution game amongst siblings extends to a setting where the contributors (spouses) belong to different families. More strikingly still, the mechanism may also have dramatic redistributive implications. In particular, we show that the rotten kids mechanism combined with a contribution game to a household public good may lead to an astonishing equalization of consumptions between and within families, even when their parents’ wealth levels differ. The most striking results obtain when wages are equal and when parents’ initial wealth levels are not too different. For very large wealth differences, the mechanism must be supplemented by a (mandatory) transfer that brings them back into the relevant range. When wages differ but are similar, the outcome will be near efficient (and near egalitarian).