Are siblings obsessed with moral hazard?

In most Darwinian models there is competition across siblings for resources and parental attention, from the womb but also stretching into adulthood.  Siblings who do well therefore will be hyper-aware of the strategies employed by their brothers and sisters.  They will need to counter those strategies on a very regular basis and furthermore they will on average be deploying similar strategies themselves.

At the same time, siblings probably won’t see each other as so evil by nature.  They will be realistic about motives — some would say cynical — while at the same time recognizing that the siblings are probably, on average, no worse than themselves.  Plus there is a natural genetic and also family affinity.

How about mothers?  Genetically speaking, mothers often adopt the interests of the sibling as “their own.”  For instance a lot of mothers died in childbirth before modern medicine, when alternative biological arrangements would have given the mothers greater protection.  So the children can commandeer the loyalty of the mother (and sometimes the father) more readily than they can commandeer the loyalties of their siblings.

Mothers are therefore often deceived about or simply tolerant of the manipulations employed by their children on them.  In other words, mothers worry less about moral hazard problems with respect to their children.  The siblings will in some respects understand these strategies better than the mother will.

The other children may feel that a mother should punish (or possibly but less likely reward) the other siblings more.  And “Johnny is being a stinker” will be a more frequent complaint than “Johnny is possessed with Original Sin.”

In turn, mothers may worry more about problems of type.  If a mother is hyper-aware of the faults of her children, she may do a better job of protecting them or teaching them how to overcome those limitations.

A world where fewer people have siblings may be a world where recognizing moral hazard problems may be for many people less intuitive.  Is it also possible that men may on average be more aware of moral hazard problems than are women?  And women more aware of problems of type?


When I was a kid, my sister always wanted to pay with my toys, but I wasn't particularly interested in playing with hers. I lobbied my parents to allow me to charge her for playing with my toys. They replied that since she had to share her toys freely with me, it was only fair that I should share mine freely with her. I pointed out that if she had to pay to use my toys, she would have an incentive to ask for presents that both of us could enjoy, so she would have something to trade with me. My parents did not think like economists.

Also: Take THAT, Ray Lopez.

Sorry I was away from my PC Brandon Berg, and missed being first to post. But, as a good troll--or provocative poster--I know how to hijack a thread by posting a reply to the top post, as here. Some observations:

--is this original work by TC? No link. TC is dabbling in evolutionary genetics, a speculative field. It follows from his work on anarchy, see last post, where he posited private security forces would "gang up" or collude to form a sort of state, which was also interesting but speculative.

--here in the Philippines--aside from Philander Rodman (Dennis Rodman's dad, who has a dozen 'wives'),and aside from some Muslims in the south who are allowed to have 3 wives, some as young as 16 (my gf and soon to be wife, since there's no negative consequence to getting married here if you're a US citizen, as it has no legal effect outside of PH, is half my age btw)--I have met people, several actually, who come from families of 12 to 14. The record though for me was a DC cabbie from Somalia who had 18 brothers and sisters, but here, a dozen siblings is not uncommon. Imagine the rivalries.

The US doesn't recognize Philippine marriages? So if a married couple immigrates to the US, they have to get remarried?

Yes Brandon Berg, that is correct.

That's complete nonsense. The USCIS, at least, very much recognizes Filipino marriages.

@ Immigration lawyer: if you are new to this blog you should note that 90% of what Ray Lopez posts is complete nonsense.

@Immigration lawyer - Not what I've heard, sorry. Contact me at Raylopez88 at gmail dot com if you wish to discuss further. I am talking about a US citizen marrying a Filipino in a church ceremony in the Philippines. In the UK, and in the US I've been told, it has no legal effect. Comity of nations and all that.

OK I correct myself, in view of this: it seems only the UK, not the US, does not recognize foreign marriages. Anyway I think a religious marriage in the Philippines does not count anyway, but that's beside the point.

Many libertarians want to use market forces to solve sibling rivalry, but I believe working through sibling rivalries provides good training on basic pro-social behaviors. If we lived in a world in which all our relationships (with employers, spouses, friends, colleagues, etc...) could be completely contracted and subject to costless enforcement, then moral hazard in childhood would be an unfortunate and unique problem needing a solution. But since that's not how life works, it provides vital training in the prosocial traits needed for dealing with a world of moral hazard.

This is assuming the conclusion. Was BB's sister really better off having access to BB's toys in spite of his objections? Maybe that taught her that you can have anything you want as long as you complain loudly enough. Does it teach BB good things either? Perhaps it makes him used to sharing, or perhaps it tells him that authority rules unjustly and you can only settle things with your fists.

Of course this whole toy thing is only a small matter, and any effect it has on peoples personalities will be correspondingly small too.

Or, maybe it will be a world where the term "moral hazard" is not over used.

That is pretty much the whole world other than economics journals and blogs.

If you don't like the term, I suggest either avoiding economist-created content, or mentally substituting another term, such as "smelly boogers", as you read.

You seem to be reading your own biography into this. Misappropriating words and phrases is common with economists. They have a habit of thinking they can slather on the magical thinking of their religion onto everything. Evolutionary biology does not work as Tyler imagines it here.

Sorry, it was intended as a lighthearted comment about how "moral hazard" is a niche term, not a serious response to Tyler's claims.

I missed it. Sorry about that. For some reason the phrase "moral hazard" sends me into a rage. It has become the thing stupid people say because they think it is what smart people say. I was on a conference call the other day and some dimwitted broad kept chirping about moral hazard, apparently thinking it it meant "immorality."

But, that's what we get for allowing women to work outside the home.


Why the rage? We live in a world where people have different interests, those interests come into conflict. Since monitoring and enforcement systems are necessarily incomplete, there exists moral hazard. Your "dimwitted broad" doesn't seem so dimwitted to me for recognzing the moral dimensions of moral hazard. These days economists seem to prefer a value-neutral term like principle-agent relationships, but that doesn't make the moral dimension go away. Solutions to principle-agent problems will always rest on the prosocial side of human nature.

Justin, Z has been a rage-filled poster since forever. It's an attention grab. See just above, the comment about women outside the home. He's Angry Paleocon Guy (TM)

Typical college dropout rage against "eggheads". I guess they are bitter about eating the marshmallows.

Good post. This is a very interesting subject. We hear a lot about how fewer children is such a wonderful thing for the parents, but very little about what it does to those with fewer siblings. In my view it is less about competing for attention and more about learning to do things on your own. If your parents are taking care of six children, you learn to be more self-sufficient. Today's designer kids get everything handed to them.

This post is an excellent illustration of why open-loop, armchair theorizing is dangerous. In the absence of any empirical data to test a falsifiable proposition against, it is important to remember that this whole post is pure speculation.

A smart guy can come up with ingenious theories that are tantalizingly appealing but entirely wrong.

To the extent that one uses such thought experiments to merely generate plausible hypotheses there's no problem. But the big risk is that readers will make the mental jump from speculation to proven factual position pretty easily.

Ergo. It is also possible that men may be *less* aware of moral hazard problems than are women. Or perhaps there are no differences between men & women (in this context). Nor between a world with less siblings & many.

The important point to emphasize is that at this stage we have absolutely no clue & are throwing darts in the dark.

Naturally. If we were lobbing empirical data around, this would be a paper published in a journal, not an open question on Marginal Revolution. Readers extrapolate at their own risk.

Maybe this is a ploy to get the empirical evidence hiding in the woodwork to show itself. Come out, come out, wherever you are!

Heh. I would like a sign that says "Extrapolate at your own risk".

Could you provide a definition of "problems of type"?

How very uninteresting.

Do the same habits develop in school or day care? I'm actually asking because I don't know, or don't remember. Do kids in day care watch out for unfairness -- the other kid got a bigger snack, more grape juice, whatever? Or do they shrug and accept their lot as victims of an uncaring institution?

They protest and organize. Free lunchables for all!!! Liberty, Equality, Fraternity!!!

But after the Big Block Riots of 1978, the schools now administer large doses of Soma. Thus, the protests have been minimal ever since

'The siblings will in some respects understand these strategies better than the mother will.'

Unless that mother also had siblings - there isn't exactly all that much new in such strategies, after all.

Interestingly ignored is the time interval involved - a 3 year old is not likely to have another 3 year old as a sibling, but a 13 year old might quite well have a 5 year old as a sibling. And one can reasonably expect that the strategies and methods of the 13 and 5 year old siblings are unlikely to be particularly comparable

"Unless that mother also had siblings – there isn’t exactly all that much new in such strategies, after all."

Mothers, because of the nature of their relationships to their children, tend not to view things in the detached, analytical way that would allow them to recognize this. At least, that is the case in my experience. I used to be frustrated that my siblings would very obviously push all of my mother's buttons, and she never recognized it.

"Interestingly ignored is the time interval involved"

The eight year interval that you posit is unusually large, and it probably would lead to atypical dynamics. Most consecutive siblings are much closer together. While a lot of Tyler's post is quite speculative, the idea that siblings compete is not.

'At least, that is the case in my experience. I used to be frustrated that my siblings would very obviously push all of my mother’s buttons, and she never recognized it.'

But this is something different - the youngest plays baby, for example. But whether that youngest is one of three or one of six probably doesn't matter that much. There really aren't a lot of new strategies available.

And just to be clear - sibling order is uninteresting, but the first born has a hard time pushing mother's baby button with four younger siblings around.

Mea culpa - I should have finished reading before responding.

'The eight year interval that you posit is unusually large'

Not in my personal experience - or the experience of the people several of my siblings married. Of course, there were several siblings it between in all of those cases. Such an interval is quite unsurprising in any family with more than 5 children. Which may not be as typical as in the past, but when playing a version of evo psych just so story game, the pattern over a mininum of thousands of generations is probably relevant. Which was very unlike what is stereotypically found today.

I thought "wow, a mea culpa from prior_approval" until I realized you were just sorry that you hadn't criticized enough stuff in my post.


Well, it isn't as if I don't have a background in the non-profit, non-partisan world of NoVa/DC that has managed to supplant actual discourse in the last generation.

But the point still stands, regardless of my apparently boundless cynicism.

"it isn’t as if I don’t have a background in the non-profit, non-partisan world of NoVa/DC that has managed to supplant actual discourse in the last generation."

Good grief. The tone of your comments is the Koch brothers' fault?


No, the tone of his comments is the fault of his mental pathology, which may be biological or may be environmental, but is likely a combination of the two. Just to be clear.

As the fourth of eight siblings, there was indeed competition for scarce resources, such as personal space and dinner servings (who gets seconds?). There were other mitigating factors, such as the empirical knowledge that revenge would be taken by older siblings for perceived violation of their code, such as taking their stuff or telling on them. Yes, game theory. But as Tyler surmises, family affinity kicks in as well. The just-older brother that was/is most competitive for all family resources was also the brother that spent serious time in the principal's office because he protected me from the bullies. As adults, competitiveness is pretty minor. We are more concerned with positive interactions with each other than who gets what.

As the mother of five children, I can tell those of you who are not familiar with young children that their preferences and incentives are quite transparent throughout early childhood. By the time they (mercifully) learn to act like civilized people and not reveal their every preference at every moment, you have a pretty good notion of their consistent preferences and incentives, their "type," as I understand Tyler to mean. Although they begin concealing their motivations and attempting to manipulate your systems (successfully or not), you still rely on your perception of who they are to manage demands and expectations. When two children bring home a B on a school assignment, you find yourself prodding one because you know they haven't internalized the incentive to do better, while at the same time you are consoling the other that her second-grade academic career has not been blighted by this single B.

I don't think questions of moral hazard awareness and/or problems of type are gender-specific. A father who spends time and thought on his children is just as aware as the mother; how they act on that awareness might differ, however.

"As the mother of five children, I can tell those of you who are not familiar with young children that their preferences and incentives are quite transparent throughout early childhood. "

As a father of two, I think that while preferences are transparent, motivations are not. I have a low-maintenance child and a high-maintenance child. But how much of my high-maintenance child's needs are a sibling rivalry ploy and how much are genuine? I've often imagined a conversation with an adult version of my low-maintenance child about how I always favored the high-maintenance child. I don't have any good answers. As a parent you do the best you can and hope you don't screw them up too badly.

My high-maintenance child was high maintenance from birth. My experience, of course, may not be universal.

Mine too. I'm just not sure how hard need to push him to be independent. I do my best and probably get it wrong a lot.

Oh, but to take it back to the sibling rivalry part, being high-maintenance is itself an evolutionary strategy to secure parental resources. Children are not consciously choosing high-maintenance vs. low-maintenance strategies. It's who they are.

I often wonder WTF is going on in the kids' head. But I also remember being bewildered that my father couldn't understand my preferences. I suspected my father of deliberately feigning ignorance (either out of laziness or an attempt to pursue a better result; which I thought depended on my teenage mood) because I felt the situation was rather obvious.

Now as I sometimes struggle to understand my kids I realize that I don't see the universe the same as them. They have yet to complete their model of society, and their peers now act very immature compared to my peers.

In larger families some children will be better at managing up - ie currying favor with the parents, while others will decide to manage down, either constructing their own sub-family, or deciding being popular amongst the siblings is more important. These character traits typically divide along birth order lines, not sure about sex lines. The personality traits developed this way are pretty obvious later in life and in corporate environments.

The speculation is interesting and compelling, but it flies in the face of study after study after study that shows no effect of birth order or number of siblings on anything of consequence.

Tsk Tsk, are the above commentators so dumb? Ray, I am especially disappointed in you.

Tyler is posting a Straussian fable about the Israelis/Gaza situation. Israel is the older child, Gaza is the smaller child. Common strategies by younger children are to provoke the older child verbally. When the older child responds with physical violence towards the younger child, the younger child then goes crying to the parents, asking and receiving additional attention and resources, and perhaps lowering the status and getting punishment for the older child. In this case the parents or authority figures are the US/European powers.

It is interesting to think about what strategies have been employed by older children to counter the younger child's strategy, Maybe Israel could better inform their strategy from this.

Extrapolate at your own risk.

True. But admittedly, ChrisA's interpretation does sound pretty similar to some TC movie reviews ("I can't believe nobody realizes that this movie is really about X!"). So I wouldn't rule it out.

MR is like the longest running online Rorschach test.

Well, that's how you see it...

No, I think he is talking about the Austro Hungarian empire before the outbreak of WWI and how a Wilsonian style League of Nations would have averted the conflict and led to world peace.

It's so obvious.

The Mother Figure is the League of Nations, the Father Figure is the Austrian King, and the children are members of the Empire.

Heh. And Bill Cosby's solution was to "Hit the older child. Because parents are not interested in justice, they are interested in quiet." Tough luck, Israel.

As we all know, the Soviet Union was a plot by the bourgeoisie to vaccinate the world against communism. They created a fake and nasty dictatorship of the proletariat just to discredit communism.

"A world where fewer people have siblings may be a world where recognizing moral hazard problems may be for many people less intuitive."

So in your reading Tyler is making the weakest case ever against a one state solution. Or I guess I should say, the only child solution.

I mean, it's bad enough when people forget a relatively rigorous model isn't reality. This sort of thing takes map and terrain concerns to the next level.

I am only a little ashamed to say that I do not understand this post. Can someone try to recast it in three sentences?

(1) Western people are having fewer children. (2) Individuals with few or no siblings may not recognize moral hazards and women might be especially bad at this. (3) Everything I said so far is speculative but now I will look for evidence.

Thanks, but can you explain why the term "moral hazard" is used here here?
Had you said "manipulation" or even "gamesmanship" I would get it, but "moral hazard" normally means something fairly different
and specific and I don't see this there.

(I have thought I was clear on what moral hazard was, but this is not the first or second time TC has used
it in a context that either doesn't fit what I thought - or stretches that definition to uselessness - so I'm
genuinely puzzled.)

Sorry, I'm as lost as you. No clue! :)

I was having same problem, and would not hazard a guess, moral or otherwise.

Usually, moral hazard refers to the situation where someone takes a risk and someone else bears the costs.

Maybe he meant mood affiliation.

I still don't understand that one.

I believe Tyler is implicitly positing an egalitarian distribution of parental resources (equal shares, based on need, a weighted combination of the two, whatever ...). The cooperative act for children is to accept this distribution. The antisocial act is to attempt to seize more. Thus we see that parents are in a principle-agent relationship with their children.

'In most Darwinian models there is competition across siblings for resources and parental attention, from the womb but also stretching into adulthood.'

Not Kropotkin's, nor would he argue, Darwin's own model -

Social Darwinists are 'Darwinists' as much as Stalin was a 'socailist' - but an anarchist follower of Darwin who did actual field research in Siberia - - is more than capable of speaking for himself.

This Kropotkin guy sounds like a 'group selection' theorist. Highly speculative and probably wrong.

I'm pretty sure Darwin had nothing to gainsay sibling competition and mother/child competition, and there is plenty of biological evidence in today's Darwinian framework to support these phenomena.

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