Asymmetry of Information within Family Networks

Joachim De Weerdt, Garance Genicot and Alice Mesnard

No 21685, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies asymmetry of information and transfers within a unique data set of 712 extended family networks from Tanzania. Using cross-reports on asset holdings, we construct measures of misperception of income among all pairs of households belonging to the same network. We show that there is significant asymmetry of information and no evidence of major systematic over-evaluation or under-evaluation of income in our data, although there is a slight over-evaluation on the part of migrants regarding non-migrants. We develop a static model of asymmetric information that contrasts altruism, pressure and exchange as motives to transfer. The model makes predictions about the correlations between misperceptions and transfers under these competing explanations. Testing these predictions in the data uncovers the active role played by the recipient. Our findings suggest that the recipient sets the terms of the transfers, either by exerting pressure to give on the donor or by holding the bargaining power during the exchange of services with the donor.

JEL-codes: D12 O12 O15 (search for similar items in EconPapers)
Date: 2015-10
New Economics Papers: this item is included in nep-soc
Note: DEV
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published as Joachim De Weerdt & Garance Genicot & Alice Mesnard, 2019. "Asymmetry of Information within Family Networks," Journal of Human Resources, vol 54(1), pages 225-254.

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Related works:
Journal Article: Asymmetry of Information within Family Networks (2019)
Working Paper: Asymmetry of Information within Family Networks (2014)
Working Paper: Asymmetry of Information within Family Networks (2014)
Working Paper: Asymmetry of information within family networks (2014)
Working Paper: Asymmetry of Information within Family Networks (2014)
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