The Organization of Family Interactions: Minimizing Transaction Costs and Strategic Behavior

UC Santa Cruz Economics Working Paper No. 588

26 Pages Posted: 27 Feb 2005

See all articles by Donald Wittman

Donald Wittman

University of California, Santa Cruz - Department of Economics

Date Written: February 2005

Abstract

The optimal organization of the family requires that relations are structured so that non-cooperative game playing is minimized and transaction costs are reduced. I show that therapeutic advice for behavior within the family is to create a functioning property rights system. Punishment is shown to be inferior to setting limits because the first encourages strategic game playing. I show why there is conflict between parent and their child even when the parent maximizes the child's expected discounted utility. In addition, I provide a model of the intergenerational transfer of behavior.

Keywords: internal organization of the family, transaction cost, psychology,

JEL Classification: A12, D19, D74

Suggested Citation

Wittman, Donald, The Organization of Family Interactions: Minimizing Transaction Costs and Strategic Behavior (February 2005). UC Santa Cruz Economics Working Paper No. 588, Available at SSRN: https://ssrn.com/abstract=672541 or http://dx.doi.org/10.2139/ssrn.672541

Donald Wittman (Contact Author)

University of California, Santa Cruz - Department of Economics ( email )

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HOME PAGE: http://www2.ucsc.edu/people/wittman/index.html

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