SSE/EFI Working Paper Series in Economics and Finance
Altruism and Climate
() and Ingela Alger
Abstract: Recognizing that individualism, or weak family ties, may
be favorable to economic development, we ask how family ties interact with
climate to determine individual behavior and whether there is reason to
believe that the strength of family ties evolves differently in different
climates. For this purpose, we develop a simple model of the interaction
between two individuals who are more or less altruistic towards each other.
Each individual exerts effort to produce a consumption good under
uncertainty. Outputs are observed and each individual chooses how much, if
any, of his or her output to share with the other. We analyze how the
equilibrium outcome depends on altruism and climate for ex ante identical
individuals. We also consider (a) "coerced altruism," that is, situations
where a social norm dictates how output be shared, (b) the effects of
insurance markets, and (c) the role of institutional quality. The
evolutionary robustness of altruism is analyzed and we study how this
depends on climate.
Keywords: altruism; family ties; individualism; moral hazard; evolution.; (follow links to similar papers)
JEL-Codes: D02; D13; (follow links to similar papers)
58 pages, July 10, 2006, Revised August 31, 2006
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