Skip to main content

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

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.

This is a preview of subscription content, access via your institution.

Author information

Authors and Affiliations

Authors

Additional information

Received: 19 November 2000/Accepted: 17 May 2001

The paper was written while Edward Seiler was a fellow at the department of Agricultural Economics and Management at the Hebrew University. The authors wish to thank Elad Aharoni for research assistance, and Judith Rivlin, Yacov Tsur, two anonymous referees and seminar participants at the Hebrew University for helpful comments. Responsible editor: Alessandro Cigno.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Feinerman, E., Seiler, E. Private transfers with incomplete information: A contribution to the “altruism-exchange motivation for transfers” debate. J Popul Econ 15, 715–736 (2002). https://doi.org/10.1007/s001480100114

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/s001480100114

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