The Fetters of the Sib: Weber Meets Darwin

SSE/EFI Working Paper Series in Economics and Finance No. 682

Carleton Economic Paper No. 07-13

41 Pages Posted: 11 Dec 2007

See all articles by Ingela Alger

Ingela Alger

University of Toulouse 1 - Toulouse School of Economics (TSE); CNRS UMR 5314 TSE-R; Institute for Advanced Study in Toulouse

Jorgen W. Weibull

Stockholm School of Economics - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: November 13, 2007

Abstract

We analyze the effects of family ties - "the fetters of the sib" - on the incentives for productive effort. A family is here modeled as a pair of mutually altruistic siblings. Each sibling exerts effort, or makes an investment, to produce output under uncertainty, and siblings may transfer output to each other. We show that altruism has a non-monotonic effect on effort. Equilibrium effort decreases (increases) with altruism at low (high) levels of altruism. We study how this effect depends on "climate," the magnitude and volatility of returns to effort. We also analyze the evolutionary robustness of family ties and how this robustness depends on climate. We find that family ties will be stronger in milder climates than in harsher climates, and that the evolutionarily robust degree of altruism is positive but less than one half. Decreased protection of property rights increases the evolutionarily robust degree of altruism.

Keywords: altruism, family ties, moral hazard, evolutionary robustness

JEL Classification: D02, D13

Suggested Citation

Alger, Ingela and Weibull, Jorgen W., The Fetters of the Sib: Weber Meets Darwin (November 13, 2007). SSE/EFI Working Paper Series in Economics and Finance No. 682, Carleton Economic Paper No. 07-13, Available at SSRN: https://ssrn.com/abstract=1055221 or http://dx.doi.org/10.2139/ssrn.1055221

Ingela Alger (Contact Author)

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

CNRS UMR 5314 TSE-R ( email )

France

Institute for Advanced Study in Toulouse ( email )

31015 Toulouse, Cedex 6
France

Jorgen W. Weibull

Stockholm School of Economics - Department of Economics ( email )

P.O. Box 6501
Sveavagen 65
S-113 83 Stockholm
Sweden

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
72
Abstract Views
951
Rank
597,477
PlumX Metrics