Discussion Paper 2009-43 A Model of Ideological Transmission with Endogenous

We develop a dynamic framework of ideological evolution in a two-trait population of perfect foresight individuals. We model how children are educated to a specific ideo-logical trait, liberal or traditional, which later in life will influence the level of economic activity and therefore the well-being of the family. Our aim is to study the dynamics of ideological traits when an exchange matching process takes place. We show that the ideological distance between groups, namely taste for similarity within the fam-ily, determines the long-run distribution of traits as well as the intertemporal parents’ behaviour in the intergenerational transmission process. With respect to the existing works on cultural transmission, the singularity of our model appears through the sit-uation in which parents ’ paternalism in children education is a necessary but not a sufficient condition to guarantee diversity or preservation of heterogeneity in the long run distribution of traits. In particular, when the taste for similarity within the family is sufficiently low, the intertemporal evolution of traits modifies the trade-off between preservation of ideological beliefs and exchange level in the matching process. Hence, when the opportunity cost to have children of the same type is high, altruistic parents do not promote their variant even though their are biased towards their own ideological beliefs. Assuming myopic agents does not change the qualitative results of the model