Worldviews and Tough Love Altruism

Author: Vipul Bhatt、Masao Ogaki
Date: 2018/12/26
No: DP2018-024
JEL Classification codes: D03, D1, D64
Language: English
[ Abstract ]

In this paper we develop a theoretical framework for intergenerational transmission of preferences that incorporates parental worldviews. In our model the parent has a tough love motive wherein he may allow the child to suffer in the short-run for long run benefits (Bhatt and Ogaki, 2012). In such a setting the parent may often be tempted not to discipline the child, despite the long run benefits, because that may lead to child's short-run suffering. Here the parent's worldview can assume an important role by changing his view on the rate of return for the behavior, which depends on the probability distribution of the long-run benefit to the child. Furthermore the parent's confidence in his worldview will affect the riskiness of the long run benefits of the tough love behavior. For instance, if the parent is very confident in his worldview that long run benefits of disciplining the child are greater than the child's short sufferring then the parent is more likely to be tough on the child because the long-run benefit is surer.