TY  - JOUR
AU  - Hao,Lingxin
AU  - Hotz,V. Joseph
AU  - Jin,Ginger Z.
TI  - Games Parents and Adolescents Play: Risky Behaviors, Parental Reputation, and Strategic Transfers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11872
PY  - 2005
Y2  - December 2005
UR  - http://www.nber.org/papers/w11872
L1  - http://www.nber.org/papers/w11872.pdf
N1  - Author contact info:
V. Joseph Hotz
Department of Economics
Box 90097
Duke University
Durham, NC 27708-0097
Tel: 919-660-1841
Fax: 919-684-8974
E-Mail: hotz@econ.duke.edu

Ginger Z. Jin
University of Maryland
Department of Economics
3105 Tydings Hall
College Park, MD  20742-7211
Tel: 301/405-3484
Fax: 301/405-3542
E-Mail: jin@econ.umd.edu
AB  - 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.
ER  -