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Incentives to cooperate and the discretionary power of courts in divorce law

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Author Info
Bruno Deffains ()
Eric Langlais

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Abstract

In this paper, we study how the uncertainty in the behavior of judges provides parents going to separate with incentives to cooperate. We introduce a model of cooperative bargaining to describe the behavior of parents whose preferences satisfy the characterization of risk averse/pessimistic types proposed by Yaari (1987, Econometrica, 55, 95–116) in his Dual Decision Theory under Risk. The behavior of the judge is modeled in a simple manner: he is either supposed to follow a strict rule (we will say that he uses an imperative scale of alimony), or he may use discretion (he uses an indicative scale of alimony). The point is that for both parents the judgment represents an external opportunity to divorce—the disagreement point in negotiation. We show that the effective decision of parents (cooperation versus trial) depends on the specific structure of the costs and risks associated with divorce procedures, such that more uncertainty at trial increases the incentives to cooperate for risk averse parents. Finally, we give a characterization of the optimal degree of the judges’ discretionary power required to maximize the parents’ gains from negotiation. Copyright Springer Science+Business Media, LLC 2006

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Publisher Info
Article provided by Springer in its journal Review of Economics of the Household.

Volume (Year): 4 (2006)
Issue (Month): 4 (December)
Pages: 423-439
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Handle: RePEc:kap:reveho:v:4:y:2006:i:4:p:423-439

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Web page: http://www.springerlink.com/link.asp?id=109451

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Related research
Keywords: Incentives to cooperate in divorce; Bargaining in divorce litigation with risk averse parties; Rule versus discretion in the settlement of divorces; Scale of child support; K41–J12;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn. [Downloadable!] (restricted)
  2. Stéphane Mechoulan, 2005. "“Economic Theory’s Stance On No-Fault Divorce”," Review of Economics of the Household, Springer, vol. 3(3), pages 337-359, 09. [Downloadable!] (restricted)
  3. Daniela Del Boca & Rocio Ribero, 2003. "Visitations and Transfers After Divorce," Review of Economics of the Household, Springer, vol. 1(3), pages 187-204, September. [Downloadable!] (restricted)
  4. Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December. [Downloadable!] (restricted)
  5. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March. [Downloadable!] (restricted)
  6. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer. [Downloadable!] (restricted)
  7. Yaari, Menahem E, 1987. "The Dual Theory of Choice under Risk," Econometrica, Econometric Society, vol. 55(1), pages 95-115, January. [Downloadable!] (restricted)
  8. Wakker, Peter & Tversky, Amos, 1993. " An Axiomatization of Cumulative Prospect Theory," Journal of Risk and Uncertainty, Springer, vol. 7(2), pages 147-75, October.
  9. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January. [Downloadable!] (restricted)
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  10. Kaplow, Louis, 1995. "A Model of the Optimal Complexity of Legal Rules," Journal of Law, Economics and Organization, Oxford University Press, vol. 11(1), pages 150-63, April.
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Eric Langlais, 2009. "On unilateral divorce and the "selection of marriages" hypothesis," EconomiX Working Papers 2009-9, University of Paris West - Nanterre la Défense, EconomiX. [Downloadable!]
    Other versions:
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