Two-sided Altruism and Signaling
NBER Working Paper No. 21309
This paper shows that when donors and recipients care about each other --two-sided altruism -- the presence of asymmetry of information about the donor's income leads very naturally to a signaling game. A donor who cares about the recipient's welfare has incentives to appear richer than he is when the recipient cares about him. Similarly, asymmetry of information regarding the donor's income generates a signaling game in the presence of two-sided altruism. These signaling games put upward pressure on transfers and this pressure increases with the altruism of the recipient.
Document Object Identifier (DOI): 10.3386/w21309
Published: Garance Genicot, 2016. "Two-sided altruism and signaling," Economics Letters, vol 145, pages 92-97. citation courtesy of
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