Games Parents and Adolescents Play: Risky Behaviors, Parental Reputation, and Strategic Transfers

This paper examines reputation formation in intra-familial interactions. We consider parental reputation in a repeated two-stage game in which adolescents decide whether to give a teen birth or drop out of high school, and given adolescent decisions, the parent decides whether to house and support his children beyond age 18. Drawing on the work of Milgrom and Roberts (1982) and Kreps and Wilson (1982), we show that the parent has, under certain conditions, the incentive to penalize older children for their teenage risky behaviors in order to dissuade the younger children from the same risky behaviors. The model generates two empirical implications: the likelihood of teen risky behaviors and parental transfers to a child who engaged in teen risky behaviors will decrease with the number of remaining children at risk. We test these two implications, using data from the National Longitudinal Survey of Youth, 1979 Cohort (NLSY79). Exploiting the availability of repeated observations on individual respondents and of observations on multiple siblings, we find evidence in favor of both predictions.

Games Parents and Adolescents Play: Risky Behaviors, Parental Reputation, and Strategic Transfers

This paper examines reputation formation in intra-familial interactions. We consider parental reputation in a repeated two-stage game in which adolescents decide whether to give a teen birth or drop out of high school, and given adolescent decisions, the parent decides whether to house and support his children beyond age 18. Drawing on the work of Milgrom and Roberts (1982) and Kreps and Wilson (1982), we show that the parent has, under certain conditions, the incentive to penalize older children for their teenage risky behaviors in order to dissuade the younger children from the same risky behaviors. The model generates two empirical implications: the likelihood of teen risky behaviors and parental transfers to a child who engaged in teen risky behaviors will decrease with the number of remaining children at risk. We test these two implications, using data from the National Longitudinal Survey of Youth, 1979 Cohort (NLSY79). Exploiting the availability of repeated observations on individual respondents and of observations on multiple siblings, we find evidence in favor of both predictions

Games Parents and Adolescents Play: Risky Behaviour, Parental Reputation and Strategic Transfers

This article examines parental reputation formation in intra-familial interactions. In a repeated two-stage game, children decide whether to drop out of high school or daughters decide whether to have births as teens and parents then decide whether to provide support to their children beyond age 18. Drawing on Milgrom and Roberts (1982) and Kreps and Wilson (1982) , we show that, under certain conditions, parents have the incentive to penalise older children for their adolescent risk-taking behaviour in order to dissuade their younger children from such behaviour when reaching adolescence. We find evidence in favour of this parental reputation model. Copyright � 2008 The Author(s).