NONMARKET TRANSFERS AND ALTRUISM

We examine altruistically motivated consumption transfers in an effort to account for nonmarket transfers. We find that altruistic linkages lead to autonomous, negotiation-free transfers, and that such transfer s positively respond to stronger altruism. We also find that given fai rly natural assumptions concerning the altruism parameters, mutual alt ruism does not necessarily result in group (social) harmony, even thou gh its rise narrows the conflict range. In spite of enhanced transfers prompted by such a rise, both parties may end up worse off. These res ults help explain why in some social environments a shift toward marke t-oriented transfers and exchanges may be quicker than in others, as t he disadvantages (decline in utility) associated with intragroup altru istic linkages outweigh the advantages.