Games Parents and Adolescents Play: Risky Behaviors, Parental Reputation, and Strategic Transfers

43 Pages Posted: 12 Mar 2006 Last revised: 11 Jun 2022

See all articles by Lingxin Hao

Lingxin Hao

Johns Hopkins University

V. Joseph Hotz

Duke University; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Ginger Zhe Jin

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: December 2005

Abstract

This paper examines reputation formation in intra-familial interactions. We consider parental reputation in a repeated two-stage game in which adolescents decide whether to give a teen birth or drop out of high school, and given adolescent decisions, the parent decides whether to house and support his children beyond age 18. Drawing on the work of Milgrom and Roberts (1982) and Kreps and Wilson (1982), we show that the parent has, under certain conditions, the incentive to penalize older children for their teenage risky behaviors in order to dissuade the younger children from the same risky behaviors. The model generates two empirical implications: the likelihood of teen risky behaviors and parental transfers to a child who engaged in teen risky behaviors will decrease with the number of remaining children at risk. We test these two implications, using data from the National Longitudinal Survey of Youth, 1979 Cohort (NLSY79). Exploiting the availability of repeated observations on individual respondents and of observations on multiple siblings, we find evidence in favor of both predictions.

Suggested Citation

Hao, Lingxin and Hotz, V. Joseph and Jin, Ginger Zhe, Games Parents and Adolescents Play: Risky Behaviors, Parental Reputation, and Strategic Transfers (December 2005). NBER Working Paper No. w11872, Available at SSRN: https://ssrn.com/abstract=875723

Lingxin Hao

Johns Hopkins University ( email )

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V. Joseph Hotz (Contact Author)

Duke University ( email )

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Ginger Zhe Jin

University of Maryland - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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