IDEAS home Printed from https://ideas.repec.org/a/dem/demres/v6y2002i13.html

To Tie the Knot or Not

Author

Listed:
  • Padma Rao Sahib

    (Rijksuniversiteit Groningen)

  • Xinhua Gu

    (University of Toronto)

Abstract

This paper introduces imperfect information, learning, and risk aversion in a two sided matching model. The model provides a theoretical framework for the commonly occurring phenomenon of cohabitation followed by marriage, and is consistent with empirical findings on these institutions. The paper has three major results. First, individuals set higher standards for marriage than for cohabitation. When the true worth of a cohabiting partner is revealed, some cohabiting unions are converted into marriage while others are not. Second, individuals cohabit within classes. Third, the premium that compensates individuals for the higher risk involved in marriage over a cohabiting partnership is derived. This premium can be decomposed into two parts. The first part is a function of the individual's level of risk aversion, while the second part is a function of the difference in risk between marriage and cohabitation.

Suggested Citation

  • Padma Rao Sahib & Xinhua Gu, 2002. "To Tie the Knot or Not," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 6(13), pages 355-382.
    • Handle: RePEc:dem:demres:v:6:y:2002:i:13
    DOI: 10.4054/DemRes.2002.6.13
    as

    Download full text from publisher

    File URL: https://www.demographic-research.org/volumes/vol6/13/6-13.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.4054/DemRes.2002.6.13?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Larry Bumpass & James Sweet, 1989. "National Estimates of Cohabitation," Demography, Springer;Population Association of America (PAA), vol. 26(4), pages 615-625, November.
    2. Ken Burdett & Melvyn G. Coles, 1997. "Marriage and Class," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(1), pages 141-168.
    3. John Ermisch & Marco Francesconi, 2000. "Cohabitation in Great Britain: not for long, but here to stay," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 163(2), pages 153-171.
    4. Burdett, Kenneth & Coles, Melvyn G, 1999. "Long-Term Partnership Formation: Marriage and Employment," Economic Journal, Royal Economic Society, vol. 109(456), pages 307-334, June.
    5. Waters, Melissa S. & Ressler, Rand W., 1999. "An economic model of cohabitation and divorce," Journal of Economic Behavior & Organization, Elsevier, vol. 40(2), pages 195-206, October.
    6. Robert Shimer & Lones Smith, 2000. "Assortative Matching and Search," Econometrica, Econometric Society, vol. 68(2), pages 343-370, March.
    7. Bloch, Francis & Ryder, Harl, 2000. "Two-Sided Search, Marriages, and Matchmakers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 93-115, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Audrey Light & Taehyun Ahn, 2010. "Divorce as risky behavior," Demography, Springer;Population Association of America (PAA), vol. 47(4), pages 895-921, November.
    2. Chhabra, Meenal & Das, Sanmay & Sarne, David, 2014. "Expert-mediated sequential search," European Journal of Operational Research, Elsevier, vol. 234(3), pages 861-873.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Coles, Melvyn & Francesconi, Marco, 2007. "On the Emergence of Toyboys: Equilibrium Matching with Ageing and Uncertain Careers," IZA Discussion Papers 2612, IZA Network @ LISER.
    2. Lauermann, Stephan & Nöldeke, Georg, 2014. "Stable marriages and search frictions," Journal of Economic Theory, Elsevier, vol. 151(C), pages 163-195.
    3. Herrenbrueck, Lucas & Xia, Xiaoyu & Eastwick, Paul & Hui, Chin Ming, 2018. "Smart-dating in speed-dating: How a simple Search model can explain matching decisions," European Economic Review, Elsevier, vol. 106(C), pages 54-76.
    4. Hofmann, Dirk & Qari, Salmai, 2011. "The law of attraction bilateral search and horizontal heterogeneity," SFB 649 Discussion Papers 2011-017, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    5. Adachi, Hiroyuki, 2003. "A search model of two-sided matching under nontransferable utility," Journal of Economic Theory, Elsevier, vol. 113(2), pages 182-198, December.
    6. Chade, Hector, 2006. "Matching with noise and the acceptance curse," Journal of Economic Theory, Elsevier, vol. 129(1), pages 81-113, July.
    7. Hector Chade & Gustavo Ventura, 2002. "Taxes and Marriage: A Two-Sided Search Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 955-986, August.
    8. Ramya Sundaram, 2000. "Multiple Traits in the Marriage Market: Does Diversity Sometimes Win?," Econometric Society World Congress 2000 Contributed Papers 1666, Econometric Society.
    9. Casari, Marco & Lisciandra, Maurizio, 2015. "Gender Discrimination and Common Property Resources," IZA Discussion Papers 9601, IZA Network @ LISER.
    10. Coen N. Teulings & Pieter A. Gautier, 2004. "The Right Man for the Job," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(2), pages 553-580.
    11. Davi B. Costa, 2021. "Benefits of marriage as a search strategy," Papers 2108.04885, arXiv.org, revised Aug 2021.
    12. Pieter A. Gautier & Coen N. Teulings, 2000. "The Right Man for the Job: Increasing Returns in Search?," Econometric Society World Congress 2000 Contributed Papers 0066, Econometric Society.
    13. Xu, Yujing & Yang, Huanxing, 2019. "Targeted search with horizontal differentiation in the marriage market," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 31-62.
    14. Rafael Silveira & Randall Wright, 2016. "Venture Capital: A Model of Search and Bargaining," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 19, pages 232-246, January.
    15. Maristella Botticini & Aloysius Siow, 2011. "Are There Increasing Returns to Scale in Marriage Markets?," Working Papers 395, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    16. Kai Konrad, 2015. "Affection, speed dating and heartbreaking," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(1), pages 159-172, January.
    17. Casari, Marco & Lisciandra, Maurizio, 2014. "Gender Discrimination and Common Property Resources: a Model," MPRA Paper 57712, University Library of Munich, Germany.
    18. Akiko Maruyama, 2018. "One-sided learning about one fs own type in a two-sided search model: The case of n types of agents," GRIPS Discussion Papers 18-15, National Graduate Institute for Policy Studies.
    19. Gautier, Pieter A. & Svarer, Michael & Teulings, Coen, 2005. "Marriage and the City," IZA Discussion Papers 1491, IZA Network @ LISER.
    20. Baughman, Garth, 2025. "Deadlines and matching," Journal of Economic Theory, Elsevier, vol. 228(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dem:demres:v:6:y:2002:i:13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Editorial Office (email available below). General contact details of provider: https://www.demogr.mpg.de/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.