Two-sided altruism and signaling

- Asymmetry of information about a donor's income generates a signaling game in the presence of two-sided altruism.
- Similarly, asymmetry of information regarding the donor's income generates a signaling game in the presence of two-sided altruism.
- These signaling games put upward pressure on transfers and this pressure increases with the altruism of the recipient.

When donors and recipients care about each other-two-sided altruism-asymmetry of information about the donor's income or about the donor's altruism leads naturally to a signaling game. The desire to signal income or altruism puts upward pressure on transfers.