Remit for What? The Impact of Information Asymmetries in Transnational Households

The main purpose of this paper is to check whether information asymmetry may affect the allocation of a given budget between in-kind consumption-type goods and in-kind investment-type choices. In order to test the model, we use the results of a lab-in-the-field experiment where migrants engage in a dictator game and are asked to earmark a given budget between consumption and investment goods to be delivered to the most closely connected household (MCCH). Three different scenarios of information sharing with the MCCH on the choices made by the migrant are considered – private information, full information sharing and information sharing with a social excuse for investment goods. Empirical results confirm that under private information investment goods are preferred, whereas under full information sharing we observe a significant bias towards consumption goods (about 70 euros more out of a total budget value of 1000 euros, i.e. 7%). This behavior under different information sharing scenarios may be interpreted as evidence of self-interest motives to remit rather than pure altruism.