Abstract
The aim of this paper is to provide a model where altruism is determined endogenously. Altruism is an attitude that influences our actions toward other people. The model presented in this paper assumes that this influence also operates in the opposite direction via reciprocity: that is, people modify their altruism based on the actions of other agents. The paper uses a dynamic setup with two agents whose incomes are random. Depending on the incomes realized, transfers are made. These transfers convey information about the level of altruism of the donors. The agents use this information to adjust their own level of altruism. If the transfer received by an agent implies that the altruism level of the other agent is higher (lower) than that of the receiver, then the latter will increase (decrease) his level of altruism. This behavior induces a stochastic process for the levels of altruism. The long level of altruism is studied using both analytic and computer simulations tools.
Highlights
Altruism is an attitude toward other people that influences our actions
The model presented in this paper study endogenous altruism in a dynamic way
The focus was on the conditions that allow altruism ton survive in the long run
Summary
Altruism is an attitude toward other people that influences our actions. it is not unnatural to think that other people’s actions toward us can influence our level of altruism. In some sense agents try to be as altruistic as the other: “if the other person cares about me more (less) than I care about her I will raise (diminish) my level of altruism toward her” This does not imply that the action of the agent is a direct consequence of the action of other people. My paper studies the dynamics and limit properties of the level of altruism induced by this behavior Another paper in this line is Cervellati et al (2010), who formulated a model in which sentiments (as they referred to altruism) toward other people are determined by the actions of these people.
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