The probability of income loss depends on talent and effort. Effort has positive externalities and therefore individuals are awarded status in proportion to their perceived diligence. The social norm requires more effort from individuals perceived as more talented. But talent is private...

The empirical evidence suggests that parents use inter vivos gifts (i.e., transfers of tangible and financial property) to compensate less well off children whereas post mortem bequests are divided equally among siblings. We study a theoretical model assuming, first, that the amounts given is...