IDEAS home Printed from https://ideas.repec.org/p/cdl/agrebk/qt1t52k4c5.html
   My bibliography  Save this paper

Dynamic bargaining in households (with application to Bangladesh)

Author

Listed:
  • Ligon, Ethan

Abstract

Much recent empirical work on intra-household allocation uses the axiomatic Nash Bargaining model to make predictions about how the distribution of consumption within the household will respond to individuals' income shocks. However, one of the basic axioms underlying this approach is that allocations will be Pareto optimal, so forward-looking, risk adverse household members ought to be expected to smooth away any such response to income shocks-Pareto optimality seems to be too strong in a dynamic setting. In this paper we use explicitly dynamic framework and replace the axiom of Pareto optimality with a weaker notion of efficiency. We give a simple algorithm for computing allocations, and construct an extended example, meant to model the effects of Grameen Bank lending on intra-household allocation in Bangladesh. The model resolves a puzzle in the literature, namely, it predicts that women borrowers will often voluntarily surrender control ("pipeline") their loans to their husbands.

Suggested Citation

  • Ligon, Ethan, 2002. "Dynamic bargaining in households (with application to Bangladesh)," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt1t52k4c5, Department of Agricultural & Resource Economics, UC Berkeley.
  • Handle: RePEc:cdl:agrebk:qt1t52k4c5
    as

    Download full text from publisher

    File URL: http://www.escholarship.org/uc/item/1t52k4c5.pdf;origin=repeccitec
    Download Restriction: no

    References listed on IDEAS

    as
    1. Randy A. Becker & J. Vernon Henderson, 2001. "Costs of Air Quality Regulation," NBER Chapters,in: Behavioral and Distributional Effects of Environmental Policy, pages 159-186 National Bureau of Economic Research, Inc.
    2. Cummins, Jason G. & Hassett, Kevin A. & Hubbard, R. Glenn, 1996. "Tax reforms and investment: A cross-country comparison," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 237-273, October.
    3. Kenneth L. Judd, 1998. "Numerical Methods in Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100711, January.
    4. Pizer, William A., 1999. "The optimal choice of climate change policy in the presence of uncertainty," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 255-287, August.
    5. Hoel, Michael & Karp, Larry, 2001. "Taxes and quotas for a stock pollutant with multiplicative uncertainty," Journal of Public Economics, Elsevier, vol. 82(1), pages 91-114, October.
    6. Xie, Danyang, 1997. "On Time Inconsistency: A Technical Issue in Stackelberg Differential Games," Journal of Economic Theory, Elsevier, vol. 76(2), pages 412-430, October.
    7. Goulder, Lawrence H. & Mathai, Koshy, 2000. "Optimal CO2 Abatement in the Presence of Induced Technological Change," Journal of Environmental Economics and Management, Elsevier, vol. 39(1), pages 1-38, January.
    8. Buonanno, Paolo & Carraro, Carlo & Galeotti, Marzio, 2003. "Endogenous induced technical change and the costs of Kyoto," Resource and Energy Economics, Elsevier, vol. 25(1), pages 11-34, February.
    9. Goulder, Lawrence H. & Schneider, Stephen H., 1999. "Induced technological change and the attractiveness of CO2 abatement policies," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 211-253, August.
    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. Ngo, Thi Minh-Phuong & Wahhaj, Zaki, 2012. "Microfinance and gender empowerment," Journal of Development Economics, Elsevier, vol. 99(1), pages 1-12.
    2. Del Boca, Daniela & Flinn, Christopher, 2012. "Endogenous household interaction," Journal of Econometrics, Elsevier, vol. 166(1), pages 49-65.
    3. Chen, Natalie & Conconi, Paola & Perroni, Carlo, 2007. "Women’s Earning Power and the “Double Burden” of Market and Household Work," The Warwick Economics Research Paper Series (TWERPS) 800, University of Warwick, Department of Economics.
    4. Kazianga, Harounan & Wahhaj, Zaki, 2017. "Intra-household resource allocation and familial ties," Journal of Development Economics, Elsevier, pages 109-132.
    5. Gustavo J. Bobonis & Melissa González-Brenes & Roberto Castro, 2013. "Public Transfers and Domestic Violence: The Roles of Private Information and Spousal Control," American Economic Journal: Economic Policy, American Economic Association, vol. 5(1), pages 179-205, February.
    6. Wolff, Francois-Charles, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
    7. Steve Laufer & Ahu Gemici, 2009. "Marriage and Cohabitation," 2009 Meeting Papers 1191, Society for Economic Dynamics.
    8. Robert A. Pollak, 2017. "How Bargaining in Marriage drives Marriage Market Equilibrium," NBER Working Papers 24000, National Bureau of Economic Research, Inc.
    9. Chen, Natalie & Conconi, Paola & Perroni, Carlo, 2006. "Does Migration Empower Married Women?," CEPR Discussion Papers 5559, C.E.P.R. Discussion Papers.
    10. Leora Friedberg & Steven Stern, 2014. "Marriage, Divorce, And Asymmetric Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55, pages 1155-1199, November.
    11. Hoel, Jessica B., 2015. "Heterogeneous households: A within-subject test of asymmetric information between spouses in Kenya," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 123-135.
    12. Vegard Iversen et al, 2009. "Does one size fit all? An experimental test of household models in East Uganda," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 09-04, Indian Statistical Institute, New Delhi, India.
    13. Luke, Nancy & Munshi, Kaivan, 2011. "Women as agents of change: Female income and mobility in India," Journal of Development Economics, Elsevier, vol. 94(1), pages 1-17, January.

    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:cdl:agrebk:qt1t52k4c5. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff). General contact details of provider: http://edirc.repec.org/data/dabrkus.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.