A Kantian-economic approach to altruism in the household

Mark D White

doi:10.1057/palcomms.2015.5

Abstract

AbstractEconomists who study the family acknowledge the importance of altruism and resource allocation that occurs between family members, and have developed a number of novel approaches to modelling this behaviour. This article suggests a new method, based on the moral philosophy of Immanuel Kant, which will highlight several unique features of intrafamily altruism. After summarizing Kant’s ethics and how it can be incorporated into the standard economic model of choice, I show how Kantian concepts of perfect and imperfect duty cast the standard models of intrafamily altruism and resource allocation in a new light. The inclusion of duty into the modelling explains how altruistic behaviour can continue when the affection has left a marriage, and blurs the lines between cooperative and non-cooperative models of resource allocation by highlighting the importance of binding commitment without external enforcement.

Highlights

Mainstream economics has long struggled to model ethical behaviour, including what is perhaps its simplest type, altruism
Economists studying intrafamily altruism have modelled it using a variety of methods, ranging from “warm glow”, multiple utilities and interdependent preferences, all of which have expanded the explanatory power of models in the field
Most of the approaches used to model altruism in economics to this point have been rooted in the basic frameworks of preference satisfaction and utility maximization, both of which reflect the utilitarian thinking that lies at the heart of economic theory and prevent the consideration of principled behaviour that transcends preferences and utility

Summary

Introduction

Mainstream economics has long struggled to model ethical behaviour, including what is perhaps its simplest type, altruism. After a brief summary of Kantian ethics and how it can be integrated into the standard economic decision-making framework of constrained preference-satisfaction, I will survey the most popular models of intrafamily altruism and resource allocation, focusing on the nature of preferences, the use of interdependent utility functions and bargaining models used therein.

Results

Conclusion