A Fresh Look at the Rotten Kid Theorem --- and Other Household Mysteries
dc.contributor.author | Bergstrom, Theodore C. | en_US |
dc.date.accessioned | 2013-11-14T23:22:56Z | |
dc.date.available | 2013-11-14T23:22:56Z | |
dc.date.issued | 1987-01-08 | en_US |
dc.identifier.other | MichU DeptE CenREST W87-5 | en_US |
dc.identifier.other | D640 | en_US |
dc.identifier.other | D110 | en_US |
dc.identifier.other | J120 | en_US |
dc.identifier.uri | https://hdl.handle.net/2027.42/101078 | |
dc.description.abstract | Gary Becker's "Rotten Kid theorem" asserts that if all family members receive gifts of money income from a benevolent household member, then even if the household head does not precommit to an incentive plan for family members, it will be in the interest of selfish family members to maximize total family income. I show by examples that the Rotten Kid theorem is not true without assuming transferable utility. I find a simple condition on utility functions that is necessary and sufficient for there to be the kind of transferable utility needed for a Rotten Kid theorem. While restrictive, these conditions still allow one to apply the strong conclusions of the Rotten Kid theorem in an interesting class of examples. | en_US |
dc.description.sponsorship | Center for Research on Economic and Social Theory, Department of Economics, University of Michigan | en_US |
dc.relation.ispartofseries | CREST Working Paper | en_US |
dc.subject | Rotten Kid Theorem | en_US |
dc.subject | Family Income | en_US |
dc.subject | Transferable Utility | en_US |
dc.subject.other | Altruism | en_US |
dc.subject.other | Consumer Economics: Theory | en_US |
dc.subject.other | Marriage | en_US |
dc.subject.other | Marital Dissolution | en_US |
dc.subject.other | Family Structure | en_US |
dc.subject.other | Domestic Abuse | en_US |
dc.title | A Fresh Look at the Rotten Kid Theorem --- and Other Household Mysteries | en_US |
dc.type | Working Paper | en_US |
dc.subject.hlbsecondlevel | Economics | en_US |
dc.subject.hlbtoplevel | Social Sciences | en_US |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/101078/1/ECON064.pdf | |
dc.owningcollname | Economics, Department of - Working Papers Series |
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Economics, Department of - Working Papers Series
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