This paper studies an environment with two infinitely-lived altruistic agents whose only sources of income are a risk-free return on savings and voluntary transfers from the other player. We study the Markov-perfect equilibrium of a continuous-game (differential game). On the technical side, we...

Housing and family are prominent aspects of old age, but how they shape the elderly's savings, spending, and inter-generational transfer behavior remains elusive. We develop a dynamic, non-cooperative model of the family with an illiquid housing asset and joint bargaining between elderly parents...

How do families behave dynamically? We provide a framework for studying economic problems in which family behavior is essential. Our key innovation is the inclusion of imperfectly altruistic agents in an otherwise standard consumption–savings problem with exogenous income risk. This gives rise...

What is the relationship between wealth inequality and asset prices? We study this question in a dynamic two-agent economy with incomplete markets. Agents face correlated labor-income risk, but there is no aggregate risk. The only asset is a Lucas tree, which is traded subject to a...

How do families behave dynamically? We provide a framework for studying economic problems in which family behavior is essential. Our key innovation is the inclusion of imperfectly altruistic agents in an otherwise standard consumption–savings problem with exogenous income risk. This gives rise...

reciprocate them in the future.

Online appendix for the Review of Economic Dynamics article

This paper studies a dynamic Markovian game of two infinitely-lived altruistic agents without commitment. Players can save, consume and give transfers to each other. We identify a continuum of equilibria in which imperfectly-altruistic agents act as if they were a perfectly-altruistic dynasty...

Aging populations and increasing health-care costs will lead to an explosion in costs from long-term care (LTC) for permanently disabled elderly citizens. Governments are considering and implementing different kinds of policy responses, among them government-provided minimal care combined with...