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Journal of Population Economics

, Volume 15, Issue 4, pp 715–736 | Cite as

Private transfers with incomplete information: A contribution to the “altruism-exchange motivation for transfers” debate

  • Eli Feinerman
  • Edward J. Seiler

Abstract.

We examine the role of altruism in determining optimal transfers from a principal (a mother) to selfish agents (her children) in return for attention services. Transfer-attention contracts are studied in a setting in which informational asymmetries arise from the inability of a parent to determine the extent of her children's selfishness. We find a predominating exchange motive for transfers in the symmetric informational regime we study. However, both altruism and exchange are important motives under asymmetric information. We show that altruism facilitates transfer-attention exchange arrangements with certain trade partners under incomplete information, but diminishes trade with others.

JEL classifications: D11, D64, D82, J13 
Key words: Intergenerational transfers, mechanism design, altruism, exchange 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2002

Authors and Affiliations

  • Eli Feinerman
    • 1
  • Edward J. Seiler
    • 2
  1. 1.The Department of Agricultural Economics and Management, The Hebrew University of Jerusalem, P.O. Box 12, Rehovot 76100, Israel (Fax: +972-8-946-6267; e-mail: feiner@agri.huji.ac.il)IL
  2. 2.Bates White and Ballentine, LLC, 2001 K Street, Washington, DC 20005, USA (Fax: +1-202-408-7838; e-mail: eddie.seiler@bateswhite.com)US

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