Intrahousehold Bargaining: A Matching Model Approach with Socio-Economic Constraints

This paper introduces a matching-based approach to intrahousehold bargaining, grounded in a Pissarides-Mortensen labor-market framework. It first examines how conventional economic factors, including wages, alimony, and external support, shape each spouse's fallback position and the division of marital surplus. The analysis then incorporates family pressure, represented by social or cultural constraints such as stigma or disapproval from extended kin networks. Under both Nash and Kalai-Smorodinsky solutions, strong family pressure weakens women's fallback utility, thereby reinforcing husbands' bargaining power. The model thus explains why, in contexts where stigma remains high, women often settle for smaller resource shares despite public policies designed to protect them. The results also illustrate how reforms aimed at alleviating the financial or social penalties of divorce can substantially raise women's intramarital allocations. Policy implications include strengthening women's labor-market opportunities, improving the enforcement of alimony laws, and promoting social acceptance of divorced or single women. Overall, the findings underscore the need to integrate economic variables and cultural factors in understanding how households negotiate resource allocation and maintain or dissolve marriages.