Intergenerational Transfers: An Integrative Approach

The empirical literature was unable to conclude whether intergenerational transfers are motivated mainly by altruistic or strategic motivations. I suggest that both may be plausible, namely that people are neither pure altruists who derive utility simply from being good to others, nor pure egoists who consider only strategic selfish considerations, but are actually driven by a combination of incentives. I show that assuming a combination of motives changes, sometimes dramatically, the results obtained in the traditional models and resolves the puzzle concerning the empirical results.