Covering my Children's Expenses

I haven't been to Norway in over four years, so it was quite a treat to be back for ten days to visit friends and family. Among other things, I got to see how my three adult children are doing.

One is living in Bergen, another in Oslo, and a third in Drammen, so I got to see them separately as I moved between town. As a gesture of generosity, I told each of them that I'll cover any expenses related to eating out.

This resulted in an interesting dilemma that I hadn't expected, because the bills were not of the same size. My daughter in Bergen did a lot of cooking at home, and we hardly spent any money in restaurants. My son in Oslo took me to a burger place, and my son in Drammen took me to a fancy restaurant.

My original idea was to cover these bills according to what each had spent, but that would mean that my daughter would be compensated with a small amount for all her efforts. My son in Oslo would be compensated for a burger and a beer, and my son in Drammen would be compensated for a lavish meal. That's hardly fair. Moreover, it would generate a perverse incentive in the future, if I was to stick with this type of compensation.

Compensating any expense, however large or small, as if they were equal, incentivises indulgence. The smart thing to do when I come visiting will be to take me to expensive restaurants and spend no time preparing food at home.

The ones who host me at home with home-made food will feel unfairly treated relative to those who go out spending lavishly at my expense. I risk both incentivising indulgence and stoking resentment among my children. However, the solution to this dilemma isn't hard to find. Instead of covering every bill as if they were the same, I compensate everyone with an equal amount.

My plan is to take the biggest bill and pay everyone that amount. My daughter in Bergen will in this way end up with a monetary compensation for her frugality and homely generosity. My son in Oslo will get some spare cash for his modest and sensible choice, and my son in Drammen will get fully compensated for our indulgence.

This will come across as fair and generous towards everyone, and it will encourage everyone to spend according to their preference. My daughter will continue to be her natural homely and frugal self. My son in Oslo will continue to look for good inexpensive places, and my son in Drammen will continue to seek out fancy restaurants because that's what he likes. No-one will be incentivised to change their behaviour or feel unfairly treated.

A roast lamb dinner

By Acabashi - Own work, CC BY-SA 4.0, Link