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Intrafamily bargaining and love

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  • Man Si

Abstract

Popular culture and common wisdom testify that the way partners in a relationship feel for one another very much depends on how they treat each other. This paper posits the hypothesis that altruism or love in a relationship is endogenous to the actions of the partners and studies how this influences allocations and efficiency in a bargaining model of household decision-making. The main results are that agents treat their partner in a kinder way than without endogenously evolving love, this leads to more equitable allocations in household decision making and greater intertemporal efficiency. There are two mechanisms at work: agents treat their partner nicely to avoid retribution by a less loving partner in the future; and they treat the partner nicely so that the kind reciprocal behavior raises their own love towards the partner, which lets them enjoy higher utility. As to love, two interpretations emerge: love is a commitment device by which couples can implement Pareto superior allocations; and love is an investment good in the sense that costly nice behavior towards the partner today may ensure higher levels of trust and efficiency in the future. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Man Si, 2015. "Intrafamily bargaining and love," Review of Economics of the Household, Springer, vol. 13(4), pages 771-789, December.
    • Handle: RePEc:kap:reveho:v:13:y:2015:i:4:p:771-789
    DOI: 10.1007/s11150-014-9241-1
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    Cited by:

    1. Alistair Munro, 2018. "Intra†Household Experiments: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 134-175, February.

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    More about this item

    Keywords

    Family economics; Household bargaining; Altruism; Love; Bargaining power; Commitment; C78; D13; D64; J12;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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