Bequests as Signals: An Explanation for the Equal Division Puzzle / B. Douglas Bernheim, Sergei Severinov.

Format:

Book

Author/Creator:

Bernheim, B. Douglas.

Contributor:

National Bureau of Economic Research.

Severinov, Sergei.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7791.

NBER working paper series no. w7791

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Bequests as Signals

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2000.

Summary:

In the United States, more than two-thirds of decedents with multichild families divide their estates exactly equally among their children. In contrast, intra vivos gifts are usually unequal. These findings challenge the validity of existing theories regarding the determination of intergenerational transfers. In this paper, we develop a theory that accounts for this puzzle, based on the notion that the division of bequests provides a signal about a parent's altruistic preferences. The theory can also explain the norm of unigeniture, which prevails in other societies.

Notes:

Print version record

July 2000.