On the Existence and Characterization of Markovian Equilibrium in Models with Simple Non-Paternalistic Altruism

This paper provides sufficient conditions for existence of Markovian equilibrium in models with non-paternalistic altruism extending to one generation ahead. When utility is non-separable, we show that each equilibrium savings policy correspondence is increasing everywhere and single-valued, except perhaps on a countable number of points. It is also upper hemi-continuous where it is single valued. When utility is separable, we show that the equilibrium is unique, increasing, and continuous, and we provide an algorithm converging uniformly to the equilibrium.

Is Altruism Feasible? Interdependent Preferences Provide the Answer

Is it possible to be altruistic in the face of altruism? With a naive definition of altruism, the answer is no. If an altruistic consumer is defined to be one whose preferences over allocations satisfy an appropriate interdependence condition, then the answer is yes. However, altruism in the face of malice is impossible. One of our findings is that if two consumers are mutually altruistic, exactly one of them should adopt selfish preferences over allocations.

Intergenerational Conflict and the Political Economy of School Spending

In this paper we use survey data to examine support among voters from different age cohorts for public school spending. The survey asked potential voters in California how they intended to vote on two initiatives, one a statewide initiative that would increase spending on public schools throughout the state and the other a local initiative that would increase spending only in the respondent's local school district. We find that older voters without children generally oppose increases in state spending but are much more willing to support local spending. We examine two explanations for this voting pattern, namely the capitalization of local spending into housing values and intergenerational altruism. Our results do not strongly favor one explanation over the other. Consequently, we conclude that both factors (capitalization and intergenerational altruism) probably play important roles in sustaining support among older voters for local school spending.