Optimal parenting with present-biased children

This paper develops a game-theoretical model between an altruistic parent and a present-biased child in deciding on the amount of effort towards education. Our model posits that the degree of present bias leads to a divergence between the parent and child’s effort. Our results establish that a child...

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Main Authors: Goh, Fang Ru, Nadirah Isa, Phua, Su Boon
Other Authors: Au Pak Hung
Format: Final Year Project
Language:English
Published: 2017
Subjects:
Online Access:http://hdl.handle.net/10356/69782
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Institution: Nanyang Technological University
Language: English
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spelling sg-ntu-dr.10356-697822019-12-10T13:17:45Z Optimal parenting with present-biased children Goh, Fang Ru Nadirah Isa Phua, Su Boon Au Pak Hung School of Humanities and Social Sciences DRNTU::Social sciences This paper develops a game-theoretical model between an altruistic parent and a present-biased child in deciding on the amount of effort towards education. Our model posits that the degree of present bias leads to a divergence between the parent and child’s effort. Our results establish that a child’s human capital accumulation is increasing in parental control and decreasing in present bias. Additionally, there exists the strategic effect of the parental effort where a higher level of efforts are invested when the child is present-biased. We also observe that the optimal parenting strategy is to exert a high control over the child when they are young. Our model is potentially useful in explaining the effectiveness of parental control in a child’s accumulation of human capital. It can explain the phenomenon of the academic success of the Asian students, where there is a culture of high parental control. It is also especially useful for developing countries to realise the importance of intervention for children’s education, especially when they are young. Allocating more educational resources in early childhood education may help to accumulate human capital more effectively in a country. Bachelor of Arts 2017-03-27T07:38:54Z 2017-03-27T07:38:54Z 2017 Final Year Project (FYP) http://hdl.handle.net/10356/69782 en Nanyang Technological University 39 p. application/pdf
institution Nanyang Technological University
building NTU Library
country Singapore
collection DR-NTU
language English
topic DRNTU::Social sciences
spellingShingle DRNTU::Social sciences
Goh, Fang Ru
Nadirah Isa
Phua, Su Boon
Optimal parenting with present-biased children
description This paper develops a game-theoretical model between an altruistic parent and a present-biased child in deciding on the amount of effort towards education. Our model posits that the degree of present bias leads to a divergence between the parent and child’s effort. Our results establish that a child’s human capital accumulation is increasing in parental control and decreasing in present bias. Additionally, there exists the strategic effect of the parental effort where a higher level of efforts are invested when the child is present-biased. We also observe that the optimal parenting strategy is to exert a high control over the child when they are young. Our model is potentially useful in explaining the effectiveness of parental control in a child’s accumulation of human capital. It can explain the phenomenon of the academic success of the Asian students, where there is a culture of high parental control. It is also especially useful for developing countries to realise the importance of intervention for children’s education, especially when they are young. Allocating more educational resources in early childhood education may help to accumulate human capital more effectively in a country.
author2 Au Pak Hung
author_facet Au Pak Hung
Goh, Fang Ru
Nadirah Isa
Phua, Su Boon
format Final Year Project
author Goh, Fang Ru
Nadirah Isa
Phua, Su Boon
author_sort Goh, Fang Ru
title Optimal parenting with present-biased children
title_short Optimal parenting with present-biased children
title_full Optimal parenting with present-biased children
title_fullStr Optimal parenting with present-biased children
title_full_unstemmed Optimal parenting with present-biased children
title_sort optimal parenting with present-biased children
publishDate 2017
url http://hdl.handle.net/10356/69782
_version_ 1681034100364804096