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Marriage as a Rat Race: Noisy Pre-Marital Investments with Assortative Matching

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Abstract

We study the incentive to invest to improve marriage prospects, in a frictionless marriage market with non-transferable utility. Stochastic returns to investment eliminate the multiplicity of equilibria in models with deterministic returns, and a unique equilibrium exists under reasonable conditions. Equilibrium investment is efficient when the sexes are symmetric. However, when there is any asymmetry, including an unbalanced sex ratio, investments are generically excessive. For example, if there is an excess of boys, then there is parental over-investment in boys and under-investment in girls, and total investment will be excessive.

Suggested Citation

  • Ed Hopkins & V. Bhaskar, 2011. "Marriage as a Rat Race: Noisy Pre-Marital Investments with Assortative Matching," ESE Discussion Papers 210, Edinburgh School of Economics, University of Edinburgh.
  • Handle: RePEc:edn:esedps:210
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    Cited by:

    1. Georg Nöldeke & Larry Samuelson, 2015. "Investment and Competitive Matching," Econometrica, Econometric Society, vol. 83(3), pages 835-896, May.
    2. Du, Qingyuan & Wei, Shang-Jin, 2013. "A theory of the competitive saving motive," Journal of International Economics, Elsevier, vol. 91(2), pages 275-289.
    3. Du, Qingyuan & Wei, Shang-Jin, 2016. "A Darwinian perspective on “exchange rate undervaluation”," European Economic Review, Elsevier, vol. 83(C), pages 111-138.
    4. Trégouët, Thomas, 2015. "Gender-based price discrimination in matching markets," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 34-45.
    5. repec:aea:jeclit:v:55:y:2017:i:2:p:493-544 is not listed on IDEAS

    More about this item

    Keywords

    marriage; ex ante investments; gender differences; assortative matching tournament; sex ratio;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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