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Efficiency-Enhancing Signalling in the Samaritan's Dilemma

Author

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  • Johan Lagerlof

    (WZB Berlin)

Abstract
Suppose an altruistic person, A, is willing to transfer resources to a second person, B, if B comes upon hard times. If B anticipates that A will act in this manner, B will save too little from both agents' point of view. This is the Samaritan's dilemma. The logic of the dilemma has been employed in an extensive literature, addressing a wide range of both normative and positive issues. This paper shows, however, that the undersaving result is mitigated if we relax the standard assumption of complete information. The reason for this is that if A is uncertain about how big B's need for support is, B will have an incentive to signal that he is in great need by saving more than he otherwise would have done.

Suggested Citation

  • Johan Lagerlof, 2002. "Efficiency-Enhancing Signalling in the Samaritan's Dilemma," Microeconomics 0207001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpmi:0207001
    Note: Type of Document - Tex (SWP); prepared on PC; pages: 38 ; figures: included
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    References listed on IDEAS

    as
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    10. Johan Lagerl–f, 2004. "Efficiency-enhancing signalling in the Samaritan's dilemma," Economic Journal, Royal Economic Society, vol. 114(492), pages 55-69, January.
    11. Lindbeck, Assar & Weibull, Jorgen W, 1988. "Altruism and Time Consistency: The Economics of Fait Accompli," Journal of Political Economy, University of Chicago Press, vol. 96(6), pages 1165-1182, December.
    12. Coate, Stephen, 1995. "Altruism, the Samaritan's Dilemma, and Government Transfer Policy," American Economic Review, American Economic Association, vol. 85(1), pages 46-57, March.
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    Cited by:

    1. J. Atsu Amegashie, 2006. "Economics, Gratitude, and Warm Glow," Working Papers 0601, University of Guelph, Department of Economics and Finance.
    2. Johan Lagerl–f, 2004. "Efficiency-enhancing signalling in the Samaritan's dilemma," Economic Journal, Royal Economic Society, vol. 114(492), pages 55-69, January.
    3. Amihai Glazer & Hiroki Kondo, 2010. "Governmental Transfers Can Reduce a Moral Hazard Problem," Working Papers 101102, University of California-Irvine, Department of Economics.
    4. J. Atsu Amegashie, 2009. "Third-Party Intervention in Conflicts and the Indirect Samaritan's Dilemma," CESifo Working Paper Series 2695, CESifo.
    5. Stefano Dughera & Alain Marciano, 2023. "Inside Buchanan's Samaritan's Dilemma: altruism, strategic courage and ethics of responsibility," Economics of Governance, Springer, vol. 24(2), pages 207-233, June.
    6. Dijkstra, Bouwe R., 2007. "Samaritan versus rotten kid: Another look," Journal of Economic Behavior & Organization, Elsevier, vol. 64(1), pages 91-110, September.

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    More about this item

    Keywords

    altruism; saving; efficiency; signalling;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D10 - Microeconomics - - Household Behavior - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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