Intergenerational Altruism and Hyperbolic Discount Utility
This paper first demonstrates that Bellman equations in models with intergenerational altruism and with hyperbolic discount utility take the same and special form, part of which induces a time-inconsistent result. Then, by characterizing the common form of a Bellman equation, this paper demonstrates the existence of a time-consistent, but not necessarily optimal, plan in the two models at the same time.
KEYWORDS: Intergenerational altruism; hyperbolic discounting; time-consistency.
(Working Paper, 2001)
Intergenerational Transfers Motivated by Altruism from Children towards Parents: Children's Gifts and Parents' Education Investments
This study has two ends. The first is to construct a formal model with altruism from children towards parents and to reveal the structure of an equilibrium, which has not been studied in the existing literature. The second is to establish the existence of an equilibrium in this model by demonstrating the existence of a dynamically consistent allocation in the concept of subgame perfect Nash equilibrium.
KEYWORDS: intergenerational altruism; intergenerational transfers; subgame perfect Nash equilibrium.
(Based on chapter 3 of Ph.D dissertation. mimeo, 2000)
Intergenerational Transfer, Education Investment, and Development
As many studies have shown, whether a less developed economy may take off or fall into a poverty trap depends on an accumulation process of human capital. Some of earlier studies have demonstrated that this process is influenced by intergenerational transfers in the form of parents' education investments in children. In this paper, we will focus on a role of the education investments in an economy with the altruism that children interest in parents. Then, we demonstrate that a wage structure in an economy determines parents' behaviors of education investments in children, and, therefore, whether this economy grows or not. With larger wage differentials between workers with a lower education level and with a higher education level, the economy may take off. With smaller wage differentials, however, it may fall into a poverty trap. This finding may be important for countries in which Confucian ideas, e.g., such a idea that children should be dutiful towards parents, are deeply rooted.
KEYWORDS: intergenerational altruism; intergenerational transfers; education investments; development; take-off; wage differentials.
(Master Thesis, 1996)
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