Grandparents Matter: Perspectives on Intergenerational Altruism. An Experiment on Family Dynamic Spillovers in Public Goods Games

Marianna Baggio and Luigi Mittone

No 1502, CEEL Working Papers from Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia

Abstract: The development and use of long-lived public goods involves more than one demographic generation, leaving the classic literature on voluntary provisions partially unfit to explain complex phenomena such as welfare systems, climate policies and major infrastructure projects. This paper proposes a model that explains how equilibrium is reached in a context where a public good is produced by one generation of individuals and the following generation reaps the benefits of it. Within this model the case of intergenerational public goods production is explained using a spillover rule, where a percentage of the public good produced in time t by experimental parents will integrate the endowment of their artifactual children in t+1. A cascade mechanism allows also for the rebirth of three generations of players, mimicking the biological and anthropological mechanisms of gene transmission and intergenerational altruism. Experimental evidence shows that subjects who are reminded of their lineage membership tend to contribute more compared to those who are not included in a dynastic model. More importantly, results show that the real dynastic background of individuals is a prominent influence in the levels of investment in public goods.

Keywords: public goods; generations; intergenerational spillovers; intergenerational altruism; OLG. (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cbe, nep-dge and nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:trn:utwpce:1502

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