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Asymmetry of Information within Family Networks

Joachim De Weerdt, Garance Genicot () and Alice Mesnard ()
Additional contact information
Alice Mesnard: City University London

No 8395, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 gives support to the model of transfers under pressure or an exchange motive with the recipient holding all the bargaining power.

Keywords: asymmetric information; transfers; pressure; exchange; altruism (search for similar items in EconPapers)
JEL-codes: O12 O15 D12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta and nep-soc
Date: 2014-08
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Related works:
Journal Article: Asymmetry of Information within Family Networks (2019) Downloads
Working Paper: Asymmetry of Information within Family Networks (2015) Downloads
Working Paper: Asymmetry of Information within Family Networks (2014) Downloads
Working Paper: Asymmetry of Information within Family Networks (2014) Downloads
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