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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Aoki Takaaki
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DOI:10.17265/2159-5291/2015.01.001
Institute of Economics Research, Kyoto University
This article describes some dynamic aspects on dynastic utility
incorporating two-sided altruism with an OLG setting. The special case is
analyzed where the weights of two-sided altruism are dynamically inconsistent.
The Bellman equation for two-sided altruism proves to be reduced to one-sided
dynamic problem, but the effective discount factor is different only in the
current generation. It is shown that a contraction mapping result of value
function cannot be achieved in general, and that there can locally exist an
infinite number of self-consistent policy functions of the class 
with distinct
steady states (indeterminacy of self-consistent, differentiable policy
functions).
Bellman equation, Two-sided altruism, Dynamic inconsistency, Self-consistent policy functions, Indeterminacy, Overlapping generations model.
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