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Time Consistent Matrimony with Endogenous Trust

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  • Dufwenberg, Martin

    () (Stockholm University)

Abstract

A simple model of marriage and divorce predicts that no marriages occur. Yet, in real life, people marry all the time in seemingly similar situations. This discordance is explained using psychological game theory. An emotional guilt effect is explicitly modeled and multiple belief-dependent equilibria become possible: some marriages don’t happen, some are formed but end in divorce, some last a lifetime. For certain parameterizations a lifelong efficient marriage is guaranteed; one spouse’s approval to marry signals a trust so strong as to force the other spouse to hold beliefs which make divorce exceedingly emotionally unattractive. These results may have some bearing also on other partnerships than marriage.

Suggested Citation

  • Dufwenberg, Martin, 1996. "Time Consistent Matrimony with Endogenous Trust," Working Paper Series 1997:1, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uunewp:1997_001
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    File URL: http://www.nek.uu.se/pdf/1997wp1.pdf
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    References listed on IDEAS

    as
    1. Dufwenberg, M. & Gneezy, U., 1996. "Efficiency, Reciprocity and Expectations in an Experimental Game," Discussion Paper 1996-79, Tilburg University, Center for Economic Research.
    2. Polsby, Daniel D & Zelder, Martin, 1994. "Risk-Adjusted Valuation of Professional Degrees in Divorce," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 273-285, January.
    3. Steven Tadelis & Oliver E.Williamson, 2012. "Transaction Cost Economics," Introductory Chapters,in: Robert Gibbons & John Roberts (ed.), : The Handbook of Organizational Economics Princeton University Press.
    4. Weiss, Yoram & Willis, Robert J, 1993. "Transfers among Divorced Couples: Evidence and Interpretation," Journal of Labor Economics, University of Chicago Press, vol. 11(4), pages 629-679, October.
    5. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March.
    6. Ruffle, Bradley J., 1999. "Gift giving with emotions," Journal of Economic Behavior & Organization, Elsevier, vol. 39(4), pages 399-420, July.
    7. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, pages 1281-1302.
    8. Borenstein, Severin & Cournat, Paul N, 1989. "How to Carve a Medical Degree: Human Capital Assets in Divorce Settlements," American Economic Review, American Economic Association, vol. 79(5), pages 992-1009, December.
    9. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
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    Cited by:

    1. Anderlini, Luca & Terlizzese, Daniele, 2017. "Equilibrium trust," Games and Economic Behavior, Elsevier, vol. 102(C), pages 624-644.

    More about this item

    Keywords

    Marriage; time consistency; emotions; guilt; psychological game theory;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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