Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining

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Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining

Author Info

Saku Aura (University of Missouri)

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Saku Aura

Abstract

This paper studies a married couple's dynamic investment and consumption choices under the assumption that the couple cannot commit across time not to renegotiate their decisions. The inefficiencies that can arise are characterized. Efficiency properties of different divorce asset- division regimes are examined. A stylized common-law regime is shown to lead to fully efficient outcome in a simple model while it is shown that under a community-property regime the couple is unlikely to attain full efficiency. The effect of the inability to commit across time on the savings level is examined under a tractable special case of the model.

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Paper provided by EconWPA in its series Microeconomics with number 0304002.

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Length: 31 pages
Date of creation: 04 Apr 2003
Date of revision:
Handle: RePEc:wpa:wuwpmi:0304002

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Paper
- Aura, Saku, 2002. "Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargainin," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
- Saku Aura, 2002. "Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining," Working Papers 0217, Department of Economics, University of Missouri. [Downloadable!]

Find related papers by JEL classification:
D10 - Microeconomics - - Household Behavior - - - General
D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

This paper has been announced in the following NEP Reports:

NEP-ALL-2003-04-09 (All new papers)

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.:

Esther Duflo, 2000. "Grandmothers and Granddaughters: Old Age Pension and Intra-household Allocation in South Africa," NBER Working Papers 8061, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
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Other versions:
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Other versions:
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Other versions:
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Other versions:
- Saku Aura, . "Does the balance of power within a family matter? The case of the Retirement Equity Act," Working Papers 202, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
- Saku Aura, 2002. "Does the Balance of Power Within a Family Matter? The Case of the Retirement Equity Act," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February. [Downloadable!] (restricted)
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Other versions:
- Lundberg, S.J. & Pollak, R.A. & Wales, T.J., 1994. "Do Husbands and Wives Pool Their Resources? Evidence from U.K. Child Benefit," Working Papers 94-6, University of Washington, Department of Economics.

Full references

Cited by:
(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.)

Gonzalez, Libertad & Özcan, Berkay, 2008. "The Risk of Divorce and Household Saving Behavior," IZA Discussion Papers 3726, Institute for the Study of Labor (IZA). [Downloadable!]
Other versions:
- Libertad González Luna & Berkay Özcan, 2008. "The Risk of Divorce and Household Saving Behavior," Economics Working Papers 1111, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
Jon Strand, 2005. "Individual and Household Values of Mortality Reductions with Intrahousehold Bargaining," Journal of Risk and Uncertainty, Springer, vol. 31(2), pages 217-236, September. [Downloadable!] (restricted)
Helmut Rainer, 2003. "Should We Write Prenuptial Contracts?," Economics Discussion Papers 572, University of Essex, Department of Economics. [Downloadable!]
Other versions:
- Helmut Rainer, 2005. "Should We Write Prenuptial Contracts?," Discussion Paper Series, Department of Economics 0514, Department of Economics, University of St. Andrews. [Downloadable!]
- Rainer, Helmut, 2007. "Should we write prenuptial contracts?," European Economic Review, Elsevier, vol. 51(2), pages 337-363, February. [Downloadable!] (restricted)
Shelly Lundberg & Robert Pollak, 2003. "Efficiency in Marriage," Review of Economics of the Household, Springer, vol. 1(3), pages 153-167, September. [Downloadable!] (restricted)
Other versions:
- Shelly Lundberg & Robert A. Pollak, 2001. "Efficiency in Marriage," NBER Working Papers 8642, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Strand, Jon, 2009. "Individual and household value of mortality reductions with intrahousehold bargaining," HERO On line Working Paper Series 2004:2, Oslo University, Health Economics Research Programme. [Downloadable!]
Robert A. Pollak, 2007. "Family Bargaining and Taxes: A Prolegomenon to the Analysis of Joint Taxation," IZA Discussion Papers 3109, Institute for the Study of Labor (IZA). [Downloadable!]
Robert A. Pollak, 2005. "Bargaining Power in Marriage: Earnings, Wage Rates and Household Production," NBER Working Papers 11239, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)

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