Kinship, Incentives and Evolution – revised version: Kinship, Incentives, and Evolution

Ingela Alger and Jörgen W. Weibul ()
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Jörgen W. Weibul: Department of Economics, Stockholm School of Economics
Authors registered in the RePEc Author Service: Jörgen W. Weibull

No 07-13, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: We analyze how family ties affect incentives, with focus on the strategic interaction between two mutually altruistic siblings. The siblings exert effort to produce output under uncertainty, and they may transfer output to each other. With equally altruistic siblings, their equilibrium effort is nonmonotonic in the common degree of altruism, and it depends on the harshness of the environment. We define a notion of local evolutionary stability of degrees of sibling altruism and show that this degree is lower than the kinship-relatedness factor. Numerical simulations show how family ties vary with the environment, and how this affects economic outcomes.

JEL-codes: D13 D64 J12 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2007-11-13, Revised 2010-09-17
New Economics Papers: this item is included in nep-cbe and nep-evo
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Published: Revised version: Kinship, Incentives, and Evolution, American Economic Review, Vol. 100, No. 4 (September 2010), pp. 1725–1758

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