Governmental transfers and altruistic private transfers

If an altruist is expected to aid a person with low utility, that person may be induced to save little. Such behavior generates a good Samaritan dilemma, in which welfare is lower than when no one is altruistic. Governmental transfers, which restrict reallocation from a person who saves much to one...

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Bibliographic Details
Published in:Journal of population economics 2015-04, Vol.28 (2), p.509-533
Main Authors: Glazer, Amihai, Kondo, Hiroki
Format: Article
Language:English
Subjects:
Altruism
Children & youth
Consumption
Demography
Economics
Economics and Finance
Families & family life
Fertility
Good samaritans
Government
Labor Economics
Moral hazard
Nash equilibrium
Original Paper
Parents & parenting
Pareto optimum
Population Economics
Propensity to save
Public policy
Savings
Social Policy
Social security
Statistical analysis
Taxation
Transfer of funds
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Summary:If an altruist is expected to aid a person with low utility, that person may be induced to save little. Such behavior generates a good Samaritan dilemma, in which welfare is lower than when no one is altruistic. Governmental transfers, which restrict reallocation from a person who saves much to one who saves little, reduce the effect and can lead to an outcome which is Pareto-superior to the outcome under a Nash equilibrium with no government taxation and transfers.
ISSN:0933-1433
1432-1475
DOI:10.1007/s00148-014-0503-2