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Divorce Costs and Marital Dissolution in a One-to-One Matching Framework With Nontransferable Utilities

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  • Ismail Saglam

    ()
    (Department of Economics, TOBB University of Economics and Technology, Sogutozu Cad. 43,Sogutozu, Ankara 06560, Turkey)

Abstract

In this paper, we use a two-period one-to-one matching model with incomplete information to examine the effect of changes in divorce costs on marital dissolution. Each individual who has a nontransferable expected utility about the quality of each potential marriage decides whether to marry or to remain single at the beginning of the first period. Individuals married in the first period learn the qualities of their marriages at the beginning of the second period and then decide whether to stay married or to unilaterally divorce. We show that, for any society, there exist matching environments where the probability of the marital dissolution does not reduce divorce costs under gender-optimal matching rules. In such environments, an allocation effect of divorce costs with an ambiguous sign outweighs an incentive effect that is always negative. We also show that these results may also arise under stable matching rules that are not gender optimal.

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Bibliographic Info

Article provided by MDPI, Open Access Journal in its journal Games.

Volume (Year): 4 (2013)
Issue (Month): 1 (March)
Pages: 106-124

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Handle: RePEc:gam:jgames:v:4:y:2013:i:1:p:106-124:d:24433

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Keywords: One-to-one matching; stability; marriage dissolution; divorce; incomplete information;

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References

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  1. Spiros Bougheas & Yannis Georgellis, 1999. "The effect of divorce costs on marriage formation and dissolution," Journal of Population Economics, Springer, vol. 12(3), pages 489-498.
  2. Leora Friedberg, 1998. "Did Unilateral Divorce Raise Divorce Rates? Evidence from Panel Data," NBER Working Papers 6398, National Bureau of Economic Research, Inc.
  3. Libertad González Luna & Tarja K. Viitanen, 2006. "The effect of divorce laws on divorce rates in Europe," Economics Working Papers 986, Department of Economics and Business, Universitat Pompeu Fabra.
  4. Ayse Mumcu & Ismail Saglam, 2008. "Marriage Formation/Dissolution and Marital Distribution in a Two-Period Economic Model of Matching with Cooperative Bargaining," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 11(4), pages 3.
  5. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-87, December.
  6. Crawford, Vincent P & Rochford, Sharon C, 1986. "Bargaining and Competition in Matching Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(2), pages 329-48, June.
  7. Imran Rasul, 2006. "Marriage Markets and Divorce Laws," Journal of Law, Economics and Organization, Oxford University Press, vol. 22(1), pages 30-69, April.
  8. Justin Wolfers, 2003. "Did Unilateral Divorce Laws Raise Divorce Rates? A Reconciliation and New Results," NBER Working Papers 10014, National Bureau of Economic Research, Inc.
  9. Peters, H Elizabeth, 1986. "Marriage and Divorce: Informational Constraints and Private Contracting," American Economic Review, American Economic Association, vol. 76(3), pages 437-54, June.
  10. Allen, Douglas W, 1992. "Marriage and Divorce: Comment," American Economic Review, American Economic Association, vol. 82(3), pages 679-85, June.
  11. Jonathan Gruber, 2004. "Is Making Divorce Easier Bad for Children? The Long-Run Implications of Unilateral Divorce," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 799-834, October.
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Cited by:
  1. Saglam, Ismail, 2013. "Simple heuristics as equilibrium strategies in mutual sequential mate search," MPRA Paper 44222, University Library of Munich, Germany.
  2. Naoki Shiba, 2013. "Analysis of Asymmetric Two-Sided Matching: Agent-Based Simulation with Theorem-Proof Approach," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 16(3), pages 11.
  3. Lyndon Walker & Peter Davis, 2013. "Modelling \"Marriage Markets\": A Population-Scale Implementation and Parameter Test," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 16(1), pages 6.

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