Two-Sided Altruism and Signaling

19 Pages Posted: 29 Jun 2015 Last revised: 24 Mar 2021

See all articles by Garance Genicot

Garance Genicot

Georgetown University - Department of Economics

Date Written: June 2015

Abstract

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.

Suggested Citation

Genicot, Garance, Two-Sided Altruism and Signaling (June 2015). NBER Working Paper No. w21309, Available at SSRN: https://ssrn.com/abstract=2624436

Garance Genicot (Contact Author)

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States
202-687-7144 (Phone)
202-687-6102 (Fax)

HOME PAGE: http://www.georgetown.edu/faculty/gg58

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