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

  • Bhaskar, V.
  • Hopkins, Ed

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.

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File URL: http://hdl.handle.net/10943/339
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Paper provided by Scottish Institute for Research in Economics (SIRE) in its series SIRE Discussion Papers with number 2011-65.

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Date of creation: 2011
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Handle: RePEc:edn:sirdps:339
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  1. Hoppe, Heidrun C. & Moldovanu, Benny & Sela, Aner, 2006. "The Theory of Assortative Matching Based on Costly Signals," CEPR Discussion Papers 5543, C.E.P.R. Discussion Papers.
  2. Edward P. Lazear & Sherwin Rosen, 1979. "Rank-Order Tournaments as Optimum Labor Contracts," NBER Working Papers 0401, National Bureau of Economic Research, Inc.
  3. Gall, Thomas & Legros, Patrick & Newman, Andrew, 2012. "Mismatch, rematch, and investment," Discussion Paper Series In Economics And Econometrics 189, Economics Division, School of Social Sciences, University of Southampton.
  4. Ed Hopkins & Tatiana Kornienko, 2010. "Which Inequality? The Inequality of Endowments versus the Inequality of Rewards," American Economic Journal: Microeconomics, American Economic Association, vol. 2(3), pages 106-37, August.
  5. Bhaskar, V, 2010. "Sex selection and gender balance," MPRA Paper 22698, University Library of Munich, Germany.
  6. Peters, Michael, 2007. "The pre-marital investment game," Journal of Economic Theory, Elsevier, vol. 137(1), pages 186-213, November.
  7. Daron Acemoglu & Robert Shimer, 1998. "Holdups and Efficiency with Search Frictions," Working papers 98-14, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. Shang-Jin Wei & Xiaobo Zhang, 2011. "Sex Ratios, Entrepreneurship, and Economic Growth in the People's Republic of China," NBER Working Papers 16800, National Bureau of Economic Research, Inc.
  9. Ed Hopkins, 2012. "Job Market Signaling Of Relative Position, Or Becker Married To Spence," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 290-322, 04.
  10. Peters, Michael, 2006. "Truncated Hedonic Equilibrium," Microeconomics.ca working papers peters-06-04-11-02-42-39, Vancouver School of Economics, revised 03 Mar 2009.
  11. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-89, December.
  12. Michael Peters & Aloysius Siow, 2002. "Competing Premarital Investments," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 592-608, June.
  13. Pierre-Andre Chiappori & Murat Iyigun & Yoram Weiss, 2006. "Investment in Schooling and the Marriage Market," DEGIT Conference Papers c011_034, DEGIT, Dynamics, Economic Growth, and International Trade.
  14. Burdett, Ken & Coles, Melvyn G, 2001. "Transplants and Implants: The Economics of Self-Improvement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(3), pages 597-616, August.
  15. Iyigun, Murat & Walsh, Randall P., 2005. "Building the Family Nest: Pre-Marital Investments, Marriage Markets and Spousal Allocations," IZA Discussion Papers 1752, Institute for the Study of Labor (IZA).
  16. Ed Hopkins & Tatiana Kornienko, 2004. "Running to Keep in the Same Place: Consumer Choice as a Game of Status," American Economic Review, American Economic Association, vol. 94(4), pages 1085-1107, September.
  17. George J. Mailath & Andrew Postlewaite & Larry Samuelson, 2010. ""Pricing and Investments in Matching Markets",Second Version," PIER Working Paper Archive 10-037, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 30 Nov 2010.
  18. Roger B. Myerson, 1998. "Population uncertainty and Poisson games," International Journal of Game Theory, Springer, vol. 27(3), pages 375-392.
  19. V. Bhaskar, 2011. "Corrigendum: Sex Selection and Gender Balance," American Economic Journal: Microeconomics, American Economic Association, vol. 3(2), pages 252-53, May.
  20. repec:bla:restud:v:76:y:2009:i:1:p:253-281 is not listed on IDEAS
  21. Cole, Harold L & Mailath, George J & Postlewaite, Andrew, 1992. "Social Norms, Savings Behavior, and Growth," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1092-1125, December.
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