Mediator learning and dowry determination in an arranged marriage setting
AbstractRecently, Batabyal (2005) has analyzed a game model of dowry determination in which a mediator plays a key role. Batabyal's analysis shows that the equilibrium dowry offers from the bride and the groom optimally trade off the desire to make an assertive offer with the likelihood that this offer will be selected by the mediator. We extend the Batabyal (2005) analysis by studying the impact that learning—about the circumstances of a prospective marriage—by the mediator has on the tripartite interaction between the bride, the groom, and the mediator. Specifically, we first determine the optimal dowry offers from the bride and the groom in a separating perfect Bayesian equilibrium. Next, we show that the mediator perfectly infers the private information of the two parties from their dowry offers and that he then uses this information in part to select his preferred dowry offer.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 15 (2007)
Issue (Month): 12 ()
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Find related papers by JEL classification:
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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