Program > Papers by speaker > Silva Emilson

Monday 12
B3 - Household behavior and family economics I
Chair: Emilson Silva
› 14:55 - 15:20 (25min)
› Room 004 - T. Arbeau
Optimal Timing in Rotten Kid Families
Emilson Silva  1@  , Joao Faria  2@  
1 : University of Alberta
2 : University of Texas At El Paso

In a family context with endogenous timing, multiple public goods and alternative parental instruments, we show that the optimal timing for the sequential-action game played by rotten kids and a parent depends crucially on whether the kids are homogeneous or heterogeneous. For homogeneous kids, the rotten kid theorem holds irrespective of the parental policy instrument, implying that it is optimal to let the kids to be action leaders. If the kids are heterogeneous, however, parental leadership yields a first best outcome and, hence, it is optimal whenever the kids are economically dependent and agree on the tradeoff between public goods.

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