Delaying inter vivos transmissions under asymmetric information. From: Southern Economic Journal | Date: October 1, 1998| Author: | COPYRIGHT 1998 Southern Economic Association. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group.Copyright information

An analysis was conducted to explain why altruistic parents prefer late bequests over earlier inter vivos gifts, as well as whether or not they ought to leave rather equal bequests to their children even when the children end up with different incomes. It was shown that, when there is asymmetric information between parents and children and the children's incomes depend in part on their effort, postponing bequests is a way to reduce moral hazard.

1. Introduction

In today's societies, most bequests occur when children-heirs get close to retirement age. In many respects, this is quite late. ...

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