Monday, March 13, 2006
In Gary Becker's classic paper, "A Theory of Social Interactions" (look it up online), a family with an "effective altruist" (i.e., a parent who makes large transfers to other family members and who cares about the well being of each family member) will be well behaved. That is, family members will not engage in actions which make themselves better off, but other members of the family sufficiently worse off to create a net loss in family welfare. This occurs because the family members know that the altruist will redistribute the transfers to compensate those harmed and punish the offender. If the transfers are done correctly, then a fully informed, rational offender will not engage in the offending action because he knows it will make him worse off.
Second, Steven Landsburg describes interesting work by Bruce Weinberg on the economics of spanking. Who chooses to spank their child? Go read this short column and find out.
Subscribe to Posts [Atom]