The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Rotten Kid Theorem

  • Theodore C. Bergstrom
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2325

Abstract

The rotten kid theorem states that, if a household head is sufficiently rich and benevolent towards other household members, then it is in the self-interest of other household members to take those actions that maximize the total income of the household, even at a cost to their own private income. This theorem holds under certain restrictive assumptions, but the assumptions needed for it to be true are not satisfied in many common family decision-making environments.

Keywords

Becker, G. Conditional transferable utility Dawkins, R. Family economics Kin selection Leisure Normal goods Rotten kid theorem 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Theodore C. Bergstrom
    • 1
  1. 1.