Université de Lausanne
Ecole des HEC
Département d'économétrie et d'économie politique

Thursday February 26, 2009, 13:00
Extranef, Dorigny, room 126

Jörgen WEIBULL
(Stockholm School of Economics, Sweden)

Kinship, Incentives and Evolution

Abstract
We analyze how family ties affect incentives, with focus on the strategic interaction between two mutually altruistic siblings. The siblings exert effort tot produce output under uncertainty, and they may transfer output to each other. With equally altruistic siblings, their equilibrium effort is non-monotonic in the common degree of altruism, and it depends on the harshness of the environment. We define a notion of local evolutionary stability of degrees of sibling altruism, and show that this degree is lower than the kinship-relatedness factor. Numerical simulations show how family ties vary with the environment, and how this affects economic outcomes.

Web site of the seminar (with paper online): http://www.hec.unil.ch/deep/evenements-english/e-sem-all-2008-09.htm