Hereditary and Acquired Altruism in an Overlapping Generations Model with Heterogeneous Agents

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This study examines the steady-state bequest behavior in hereditary or acquired altruism, using an overlapping generations model with both altruistic and non-altruistic agents. Unlike existing studies that assume agent types are hereditary, we consider a situation in which altruism is acquired and that altruistic parents are altruistic to heterogeneous children. We present the following results. First, when types are hereditary, the optimal bequest decreases according to the ratio of altruistic agents, whereas when types are acquired, the optimal bequest for both agent types increases according to the ratio of altruistic agents. Second, the altruistic agent's social welfare decreases (increases) with the ratio of altruistic agents in the hereditary (acquired) case. Third, the bequest amount is smaller when types are acquired. Finally, non-altruistic agents experience greater social welfare when types are acquired than when hereditary, whereas altruistic agents' social welfare decreases. These results suggest that the difference in the environment in which agent types are determined affects the altruistic type's bequest behavior and the resulting social welfare of both agent types.

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