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In this paper, the authors criticize the view that the presence of altruism either increases the benefits of group interactions or improves the allocation of resources within families. They demonstrate first that altruism can alter the social utility possibility frontier in surprising and sometimes unfortunate ways. Next, they argue that, in a variety of situations, altruism entails exploitability and therefore causes family members to behav e in ways that leave all parties worse off. Specifically, an altruist may take u ndesirable actions in order to discourage subsequent exploitation. In addition, altruists have difficulty enforcing agreements in that they may be extremely reluctant to punish betrayals. Copyright 1988 by American Economic Association.