Two-sided Altruism and Signaling

Garance Genicot

No 21309, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper shows that when donors and recipients care about each other --two-sided altruism -- the presence of asymmetry of information about the donor's income leads very naturally to a signaling game. A donor who cares about the recipient's welfare has incentives to appear richer than he is when the recipient cares about him. Similarly, asymmetry of information regarding the donor's income generates a signaling game in the presence of two-sided altruism. These signaling games put upward pressure on transfers and this pressure increases with the altruism of the recipient.

JEL-codes: D64 F24 O15 O16 (search for similar items in EconPapers)
Date: 2015-06
New Economics Papers: this item is included in nep-exp, nep-gth, nep-hpe, nep-mic and nep-soc
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Published as Garance Genicot, 2016. "Two-sided altruism and signaling," Economics Letters, vol 145, pages 92-97.

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Journal Article: Two-sided altruism and signaling (2016)
Working Paper: Two-sided Altruism and Signaling (2015)
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