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The Affectionate Society: Does Competition for Partners Promote Friendliness?

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  • Gersbach, Hans
  • Haller, Hans

Abstract

We study household formation in a model where collective consumption decisions of a household depend on the strategic choices of its members. The surplus of households is determined by individual choices of levels of friendliness to each other. A strategic conflict arises from a coupling condition that ceteris paribus, a person's friendlier attitude reduces the individual's influence in the household's collective decision on how to divide the ensuing surplus. While partners in an isolated household choose the minimum level of friendliness, competition for partners tends to promote friendliness. We find that affluence does not buy affection, but can lead to withholding of affection by an affluent partner who can afford to do so. In general, the equilibrium degree of friendliness proves sensitive to the socio-economic composition of the population.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5030.

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Date of creation: May 2005
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Handle: RePEc:cpr:ceprdp:5030

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Keywords: collective decisions; competition for partners; coupling condition; friendliness; socio-economic composition;

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  1. Haller, Hans, 2000. "Household Decisions and Equilibrium Efficiency," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(4), pages 835-47, November.
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  19. Gersbach, Hans & Haller, Hans, 2005. "The Affectionate Society: Does Competition for Partners Promote Friendliness?," CEPR Discussion Papers 5030, C.E.P.R. Discussion Papers.
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Cited by:
  1. Gersbach, Hans & Haller, Hans, 2008. "Club Theory and Household Formation," Sonderforschungsbereich 504 Publications 08-11, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
  2. Hans Gersbach & Hans Haller, 2009. "The affectionate society: does competition for partners promote friendliness?," Economic Theory, Springer, vol. 40(3), pages 389-403, September.

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