Premium
Sibling Rivalry and Strategic Parental Transfers
Author(s) -
Chang YangMing,
Weisman Dennis L.
Publication year - 2005
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.2005.tb00678.x
Subject(s) - sibling rivalry (animals) , economics , sibling , rivalry , earnings , contest , endogeneity , altruism (biology) , microeconomics , moral hazard , labour economics , psychology , social psychology , incentive , political science , finance , management , law , econometrics
This paper develops a noncooperative Nash model in which two siblings compete for their parents' financial transfers. Treating sibling rivalry as a “rent‐seeking contest” and using a Tullock‐Skaperdas contest success function, we derive the conditions under which more financial resources are transferred to the sibling with lower earnings. We find that parental transfers are compensatory and that the family as an institution serves as an “income equalizer.” Within a sequential game framework, we characterize the endogeneity of parental transfers and link it to parents' income, altruism, and children's supply of merit goods (e.g., parent‐child companionship or child services). We show that merit goods are subject to a “moral hazard” problem from the parents' perspective.