Hotz Applies Game Theory to Parenting in Upcoming Study
03 February 2015 11:46AM
Between the eruptive hormones and heartfelt angst, raising a teenager can be a traumatizing experience for parents. Ask around and you’d be hard-pressed to find anyone who has made it through completely unscathed.
So how do parents survive their children’s teenage years? Professor V. Joseph Hotz has an answer: strategic parenting. Hotz, who specializes in the economics of the family, said that raising children is a repeated game. The objective is to maximize total family wellbeing.
“I’m interested in the economics of intergenerational family relationships and their roles in perpetuating the wellbeing of each generation,” he said. “What motivates me is using economic models such as game theory and applied econometrics to understand those relationships.”
The economist presented on this topic during his presidential address at the 2014 Annual Meetings of the Southern Economic Association (SEA) in Atlanta, Ga. He cited evidence from his paper with co-author Juan Pantano on “Strategic Parenting, Birth Order and School Performance,” which is forthcoming in the Journal of Population Economics this year.
According to Hotz and Pantano, strategic parenting can have an effective short- and long-term impact, from academic achievement to success later in life.
“There are limits to what parents can do with teenagers,” he said. “Our research on birth order sought to determine what influence parents have in deterring their children from dropping out of school or having teen births or doing drugs.”
The previously established “Rotten Kid Theorem,” put forth by late economist Gary S. Becker, states that parents can use rewards and punishments to induce a selfish child — a rebellious teenager, for example — to undertake actions that will maximize the total wellbeing of the family. However, forgiving parents — those who are averse to punishing their children — may find that their astute teens are not easily influenced by unsubstantiated threats.
Luckily, there is hope for parents with more than one offspring. Hotz and Pantano posit that parents can get their children to behave by punishing the bad, risk-taking behaviors of their first-born. By establishing a reputation for being strict, they can deter bad behaviors from arising in their later-born children.
“Call it ‘trickle down’ discipline — you put the most energy into the first-born, trying to set the tone for all,” Hotz wrote in an op-ed for Slate Magazine in 2013. “It is only later that these forgiving parents … start slacking off in their parenting. So the outcome of this strategic parenting is that while all children benefit from the first-born’s punishments, the impact is greatest on the eldest child.”
The unintended result is that first-born children tend to best their younger siblings at “a lot of things.” While it is generally accepted that birth order differences manifest as disparities in school achievement levels, it is less understood why that is. In their study, Hotz and Pantano concluded that these birth order differences in school performance may be in part the result of strategic parenting.
“So, the next time your first-borns complain that mom and dad never let you get away with what your younger siblings did, you can be assured that you’re right,” Hotz wrote. “And you’re better off because of it.”
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Can’t wait for Hotz and Pantano’s paper in the Journal of Population Economics? Read the working paper here.