Seghir, Abdelkrim and Salem, Sherif Gamal (2010): Infinitely-lived agents via two-sided altruism.
This is the latest version of this item.
Download (286kB) | Preview
In an incomplete market with two sided altruistic agents and default. We show equilibrium existence if members of a dynasty act in an individualistic way by maximizing their own intergenerational utility functions. We also illustrate that a dynasty may end doing Ponzi schemes if its members act in a collectivistic way by maximizing a dynasty's collectivistic utility. We also prove that Ponzi schemes are ruled out and equilibrium existence is restored if there exist, always in the future, some agents who are not too altruistic either towards their parents or their ospring.
|Item Type:||MPRA Paper|
|Original Title:||Infinitely-lived agents via two-sided altruism|
|Keywords:||Infinitely-Lived Agents, Two-Sided Altruism, Individualistic Equilibrium, Collectivstic Equilibrium.|
|Subjects:||D - Microeconomics > D9 - Intertemporal Choice and Growth > D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving
D - Microeconomics > D6 - Welfare Economics > D64 - Altruism; Philanthropy
D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D52 - Incomplete Markets
|Depositing User:||Sherif Gamal Salem|
|Date Deposited:||24. Jun 2011 21:00|
|Last Modified:||13. Feb 2013 16:25|
Araujo, A.P., M.R. Pascoa, and J.P. Torres-Martnez (2002): Collateral Avoids Ponzi Schemes in Incomplete Markets. Econometrica, 70, 1613-1638.
Arrondel, L., and A. Laferrere (2001): Taxation and wealth transmission in France. Journal of Public Economics, 79, 3-33.
Balasko Y. and K. Shell (1980): Existence of Equilibrium for a Competitive Market.Econometrica, 22, 265-290
Bergstrom, T. ( 1971,a): A Scandinavian Consensus Solution for Ecient Allocation with Non-Malevolent Preferences. Journal of Economic Theory, 2, 383-398.
Bergstrom, T. (1971,b): Interrelated Consumer Preference and Voluntary Exchange. in Papers in quantitative economics , eds. by A. Zarley. (Kansas University Press,Lawrence, KS), 79- 94.
Bergstrom, T. (1997): A Survey of Theories of the Family. in Handbook of Population and Family Economics, eds. by Mark R.Rosenzweig and Oded Stark, Amsterdam: North Holland.
Bergstrom., T. (1999): Systems of Benevolent Utility Functions. Journal of Public Economic Theory, 1.1, 71-100.
Bewley, T. (1972): Existence of Equilibria in Economies with Innitely Many Commodities. Journal of Economic Theory, 49, 514-540.
Dubey, P., J. Geanakoplos and M. Shubik (2005): Default and punishment in general equilibrium. Econometrica 73, 1-37.
Florenzano M., and P. Gourdel (1996): Incomplete Markets in Innite Horizon: Debt Constraints Versus Nodes Prices. Mathematical Finance, 6, 167-196.
Florenzano M., P. Gourdel and M. Pascoa (2001): Overlapping Generations Model with Incomplete Markets. Journal of Mathematical Economics, 18, 357-376.
Fuster, L. (2000): Capital accumulation in an Economy with dynasties and uncertain Lifetimes. Review of Economic Dynamics, 4, 650-674.
Gale, W.J., and J.K. Scholz (1994): "Intergenerational transfers and the accumulation of wealth," Journal of Economic Perspectives, 8, 145-160.
Geanakoplos., J. and H. Polemarchakis (1991): Overlapping Generations. in Handbook of Mathematical Economics, eds. W. Hildenbrand and Hugo Sonnenschein , Volume IV. Amsterdam: North Holland, 1899-1962.
Geanakoplos, J., and W.R. Zame (1995): Default, collateral and derivatives. Mimeo, Yale University.
Hernandez, A., and M. Santos (1996): Competitive Equilibria for Infinite Horizon Economies with Incomplete Markets. Journal of Economic Theory, 71, 102-130.
Hori, H. (1989): Utility functionals with nonpaternalistic intergenerational altruism: The case where altruism extends to many generations. Journal of Economic Theory, 56, 451-467.
Lambrecht, S., P. Michel and E. Thibault. (2006): Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism. Journal of Public Economic Theory, 8, 465-486.
Magill, M., and M. Quinzii(1994): Innite Horizon Incomplete Markets. Econometrica, 62, 853-880.
Magill, M., and M. Quinzii (1996): Incomplete Markets over an Innite Horizon: Long-Lived Securities and Speculative Bubbles. Journal of Mathematical Economics, 26, 133-170.
Philippe, M. and E. Thibault. (2007) : The failure of Ricardian equivalence under dynastic altruism. Journal of Mathematical Economics, 43, 606-614.
Pascoa, M.R., and A. Seghir (2009): Harsh default penalties lead to Ponzi schemes. Games and Economic Behavior, 65, 270-286.
Samuelson, P. (1956): Social Indierence Curves. Quarterly Journal of Economics,70, 1-22.
Schmachtenberg, R. (1988): Stochastic Overlapping Generations Model with Incomplete Markets 1: Existence of Equilibria. Discussion Paper No.363-88, Department of Economics, University of Mannheim.
Seghir, A. (2006): Overlapping Generations Model with Incomplete Markets: The Numeraire Case II," Annales deconomie et de Statistique, 81, 113-139.
Seghir, A. and J.P. Torres-Martnez (2008): Wealth transfers and the role of collateral when lifetimes are uncertain. Economic Theory, 36, 471-502.
Steinert, M., and J.P. Torres-Martnez (2007): General equilibrium in CLO markets. Journal of Mathematical Economics, 43, 709-734.
Varian, H. (1984): Social Indierence Curves and Aggregate Demand. Quarterly Journal of Economics, 99, 403-414.
Winter, S. (1969): A Simple Remark On the Second Optimality Theorem of Welfare Economics. Journal of Economic Theory, 1, 99-103.
Available Versions of this Item
In nitely-lived agents via two-sided altruism. (deposited 09. Jun 2011 20:45)
- Infinitely-lived agents via two-sided altruism. (deposited 24. Jun 2011 21:00) [Currently Displayed]