The need for marriage contracts: An experimental study
AbstractA spouse who invests in relationship specific human capital enlarges the size of a couple’s total surplus. Such investments typically also weaken the outside opportunities of the specializing spouse and thereby her bargaining position. Realizing this, underinvestment in relationship specific human capital may result. This reduces the couple’s potential surplus. Private or public marriage contracts can stipulate conditions to solve this holdup underinvestment problem. This paper reports about an experiment that addresses the practical relevance of this problem. We find that although underinvestment in home production occurs, it is less frequent than game theory predicts. That is: players are prepared to specialize in home production when backwards induction predicts them not to do so. Furthermore, we find that the non-investing spouses are less opportunistic towards their partners when the large surplus has been created by the spouse than when the size of the surplus is determined exogenously. Copyright Springer-Verlag 2003
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Population Economics.
Volume (Year): 16 (2003)
Issue (Month): 3 (08)
Contact details of provider:
Web page: http://link.springer.de/link/service/journals/00148/index.htm
More information through EDIRC
Find related papers by JEL classification:
- J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
- D10 - Microeconomics - - Household Behavior - - - General
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Ernst Fehr & Susanne Kremhelmer & Klaus M. Schmidt, .
"Fairness and the Optimal Allocation of Ownership Rights,"
IEW - Working Papers
224, Institute for Empirical Research in Economics - University of Zurich.
- Ernst Fehr & Susanne Kremhelmer & Klaus M. Schmidt, 2008. "Fairness and the Optimal Allocation of Ownership Rights," Economic Journal, Royal Economic Society, vol. 118(531), pages 1262-1284, 08.
- Fehr, Ernst & Kremhelmer, Susanne & Schmidt, Klaus M., 2005. "Fairness and the Optimal Allocation of Ownership Rights," CEPR Discussion Papers 5369, C.E.P.R. Discussion Papers.
- Fehr, Ernst & Kremhelmer, Susanne & Schmidt, Klaus M., 2004. "Fairness and the Optimal Allocation of Ownership Rights," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 11, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Ernst Fehr & Susanne Kremhelmer & Klaus Schmidt, 2005. "Fairness and the Optimal Allocation of Ownership Rights," CESifo Working Paper Series 1467, CESifo Group Munich.
- Fehr, Ernst & Kremhelmer, Susanne & Schmidt, Klaus M., 2005. "Fairness and the Optimal Allocation of Ownership Rights," Discussion Papers in Economics 727, University of Munich, Department of Economics.
- Randolph Sloof, 2003. "Price-setting Power versus Private Information," Tinbergen Institute Discussion Papers 03-099/1, Tinbergen Institute.
- Marco Faravelli & Oliver Kirchkamp & Helmut Rainer, 2010. "Social Welfare versus Inequality Concerns in an Incomplete Contract Experiment," CESifo Working Paper Series 2933, CESifo Group Munich.
- repec:dgr:uvatin:2003099 is not listed on IDEAS
- Hessel Oosterbeek & Randolph Sloof & Joep Sonnemans, 2007. "Who should invest in specific training?," Journal of Population Economics, Springer, vol. 20(2), pages 329-357, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F Baum).
If references are entirely missing, you can add them using this form.