Efficiency-Enhancing Signalling in the Samaritan's Dilemma

Johan Lagerlof

Microeconomics from University Library of Munich, Germany

Abstract: Suppose an altruistic person, A, is willing to transfer resources to a second person, B, if B comes upon hard times. If B anticipates that A will act in this manner, B will save too little from both agents' point of view. This is the Samaritan's dilemma. The logic of the dilemma has been employed in an extensive literature, addressing a wide range of both normative and positive issues. This paper shows, however, that the undersaving result is mitigated if we relax the standard assumption of complete information. The reason for this is that if A is uncertain about how big B's need for support is, B will have an incentive to signal that he is in great need by saving more than he otherwise would have done.

Keywords: altruism; saving; efficiency; signalling (search for similar items in EconPapers)
JEL-codes: D10 D64 D82 D91 E21 H11 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2002-07-09
New Economics Papers: this item is included in nep-pbe
Note: Type of Document - Tex (SWP); prepared on PC; pages: 38 ; figures: included
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Efficiency-enhancing signalling in the Samaritan's dilemma (2004)
Working Paper: Efficiency-Enhancing Signalling in the Samaritan's Dilemma (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpmi:0207001

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