Samaritan vs rotten kid: Another look

Bouwe Dijkstra

No 62, Royal Economic Society Annual Conference 2002 from Royal Economic Society

Abstract: We set up a two-stage game with sequential moves by one altruistic agent and n selfish agents. The rotten kid theorem states that the altruist can only reach her first best when the selfish agents move before the altruist. The Samaritan's dilemma, on the other hand, states that the altruist can only reach her first best when she moves before the selfish agents. We find that in general, the altruist can reach her first best when she moves first, if and only if a selfish agent's action marginally only affects his own payoff. The altruist can reach her first best when she moves last if and only if there is just one commodity involved. When the altruist cannot reach her first best when she moves last, the outcome is not Pareto efficient either.

Date: 2002-08-29
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