Skip to main content Accessibility help
×
Home
Hostname: page-component-99c86f546-vl2kb Total loading time: 0.323 Render date: 2021-12-05T22:04:34.214Z Has data issue: true Feature Flags: { "shouldUseShareProductTool": true, "shouldUseHypothesis": true, "isUnsiloEnabled": true, "metricsAbstractViews": false, "figures": true, "newCiteModal": false, "newCitedByModal": true, "newEcommerce": true, "newUsageEvents": true }

3 - An exchange implication of transfers: the demonstration effect

Published online by Cambridge University Press:  23 September 2009

Oded Stark
Affiliation:
Universitetet i Oslo
Get access

Summary

Introduction

Recent evidence indicates that private intergenerational transfers of income, wealth, and in-kind services are motivated, at least in part, by exchange considerations. For example, parents attach strings to money given to their children and transfers are made with the expectation of future repayment. Evidence supporting the idea that intergenerational transfers in the family are motivated partly by self-interest is contained in papers by Lucas and Stark (1985), Bernheim, Shleifer and Summers (1985), and Cox (1987).

Despite evidence supporting the existence of an exchange element in private transfers, we do not know much about the mechanisms that sustain and enforce these two-way transactions. Enforcement of intergenerational exchanges has hardly been explored in economics. One possibility is that enforcement comes from explicit incentives: economic punishments or rewards. Bernheim, Shleifer and Summers offer evidence that the threat of disinheritance induces children to provide attention to their parents. But monetary mechanisms may not always work. Suppose a parent lends to his child, expecting repayment in old age. If anticipated future bequests motivate behavior only mildly, or not at all, the parent may have little economic leverage for enforcing an implicit long-term contractual arrangement.

Type
Chapter
Information
Altruism and Beyond
An Economic Analysis of Transfers and Exchanges within Families and Groups
, pp. 49 - 88
Publisher: Cambridge University Press
Print publication year: 1995

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Send book to Kindle

To send this book to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle.

Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Send book to Dropbox

To send content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Dropbox.

Available formats
×

Send book to Google Drive

To send content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Google Drive.

Available formats
×