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Nash-Bargained Household Decisions: Reply


  • McElroy, Marjorie B
  • Horney, Mary Jean


Pierre-Andre Chiappori's (1988) claim that the Nash-bargaining model is of "weak empirical relevance" and "neither convenient nor really restrictive" is incorrect. Nash-bargained household behavior implies a rich set of empirical implications extending well beyond the Pareto efficiency of intrafamily distributions. By systematically accounting for the impact of opportunities outside the family on resource distribution within the family, Nash-bargained demand theory considerably expands the scope of neoclassical demand theory. Such expansion can elucidate issues ranging from the impact of alimony and child support laws in developed societies to the intrafamily distribution of nutrition in less developed countries. Copyright 1990 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • McElroy, Marjorie B & Horney, Mary Jean, 1990. "Nash-Bargained Household Decisions: Reply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(1), pages 237-242, February.
  • Handle: RePEc:ier:iecrev:v:31:y:1990:i:1:p:237-42

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    References listed on IDEAS

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    Cited by:

    1. Carvajal, Andrés & González, Natalia, 2014. "On refutability of the Nash bargaining solution," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 177-186.
    2. Nicolas Moreau, 2001. "Approches pluri-décisionnelles de la famille," Revue Française d'Économie, Programme National Persée, vol. 15(4), pages 145-185.
    3. Del Boca, Daniela & Flinn, Christopher, 2012. "Endogenous household interaction," Journal of Econometrics, Elsevier, vol. 166(1), pages 49-65.
    4. Bargain, Olivier & Moreau, Nicolas, 2005. "Cooperative Models in Action: Simulation of a Nash-Bargaining Model of Household Labor Supply with Taxation," IZA Discussion Papers 1480, Institute for the Study of Labor (IZA).
    5. Valerie Lechene & Ian Preston, 2005. "Household Nash Equilibrium with Voluntarily Contributed Public Goods," Economics Series Working Papers 226, University of Oxford, Department of Economics.
    6. Hans Gersbach & Hans Haller, 2009. "Bargaining power and equilibrium consumption," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 33(4), pages 665-690, November.
    7. Bhalotra, Sonia & Heady, Chris, 2000. "Child farm labour: theory and evidence," LSE Research Online Documents on Economics 6654, London School of Economics and Political Science, LSE Library.
    8. Lechene, Valérie & Preston, Ian, 2011. "Noncooperative household demand," Journal of Economic Theory, Elsevier, vol. 146(2), pages 504-527, March.
    9. Pierre-André Chiappori & Olivier Donni, 2005. "Learning From a Piece of Pie: The Empirical Content of Nash Bargaining," THEMA Working Papers 2006-07, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    10. Xu, Zeyu, 2007. "A survey on intra-household models and evidence," MPRA Paper 3763, University Library of Munich, Germany.
    11. Sharp, David C. & Heath, Julia A. & Smith, William T. & Knowlton, David S., 2004. "But can she cook? Women's education and housework productivity," Economics of Education Review, Elsevier, vol. 23(6), pages 605-614, December.
    12. Hou, Xiaohui, 2011. "Women's decision making power and human development : evidence from Pakistan," Policy Research Working Paper Series 5830, The World Bank.
    13. Olivier Bargain & Nicolas Moreau, 2013. "The Impact of Tax-Benefit Reforms on Labor Supply in a Simulated Nash-bargaining Framework," Journal of Family and Economic Issues, Springer, vol. 34(1), pages 77-86, March.
    14. Chiappori, Pierre-André & Donni, Olivier, 2006. "Les modèles non unitaires de comportement du ménage : un survol de la littérature," L'Actualité Economique, Société Canadienne de Science Economique, vol. 82(1), pages 9-52, mars-juin.
    15. Valérie Lechene & Ian Preston, 2007. "Demand properties in household Nash equilibrium," IFS Working Papers W07/01, Institute for Fiscal Studies.
    16. Chiuri, Maria Concetta, 2000. "Individual decisions and household demand for consumption and leisure," Research in Economics, Elsevier, vol. 54(3), pages 277-324, September.
    17. Ian Smith, 2003. "The Law and Economics of Marriage Contracts," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 201-226, April.
    18. Daniela Del Boca & Christopher J. Flinn, 2004. "Modes of Spousal Interaction and the Labor Market Environment," CHILD Working Papers wp12_05, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    19. Aniela Wirz, 2004. "To my wife, with love! Does within-household specialisation explain husband's better job-education-match?," KOF Working papers 04-93, KOF Swiss Economic Institute, ETH Zurich.
    20. Xiaohui Hou, 2016. "How Does Women’s Decision-Making Power Affect Budget Share, Nutrition and Education in Pakistan?," Journal of Family and Economic Issues, Springer, vol. 37(1), pages 115-131, March.

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