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Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining

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  • Saku Aura

    () (Department of Economics, University of Missouri-Columbia)

Abstract

This paper studies married couples dynamic investment and consumption choices under the assumption that the couple cannot commit across time to not to renegotiate their decisions. The inefficiencies that can arise are characterized. Efficiency properties of different divorce asset division regimes are examined. A stylized common law regime is shown to lead to a fully efficiency in a simple model while it is shown that under community property regime the couple is unlikely to attain full efficiency. The effect of inability to commit across time on the savings level is examined under a tractable special case of the model.

Suggested Citation

  • Saku Aura, 2002. "Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining," Working Papers 0217, Department of Economics, University of Missouri.
  • Handle: RePEc:umc:wpaper:0217
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    Cited by:

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    2. Donni, Olivier & Molina, José Alberto, 2018. "Household Collective Models: Three Decades of Theoretical Contributions and Empirical Evidence," IZA Discussion Papers 11915, Institute of Labor Economics (IZA).
    3. Filippo Pericoli & Luigi Ventura, 2012. "Family dissolution and precautionary savings: an empirical analysis," Review of Economics of the Household, Springer, vol. 10(4), pages 573-595, December.
    4. Marcassa Stefania, 2013. "Divorce laws and divorce rate in the US," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 1-39, August.
    5. Shelly Lundberg & Robert Pollak, 2003. "Efficiency in Marriage," Review of Economics of the Household, Springer, vol. 1(3), pages 153-167, September.
    6. Lundberg, Shelly, 2005. "Men and islands: Dealing with the family in empirical labor economics," Labour Economics, Elsevier, vol. 12(4), pages 591-612, August.
    7. Alessandra Voena, 2015. "Yours, Mine, and Ours: Do Divorce Laws Affect the Intertemporal Behavior of Married Couples?," American Economic Review, American Economic Association, vol. 105(8), pages 2295-2332, August.
    8. Elisabeth Gugl, 2009. "Income splitting, specialization, and intra-family distribution," Canadian Journal of Economics, Canadian Economics Association, vol. 42(3), pages 1050-1071, August.
    9. Robert A. Pollak, 2011. "Family Bargaining and Taxes: A Prolegomenon to the Analysis of Joint Taxation ," CESifo Economic Studies, CESifo, vol. 57(2), pages 216-244, June.
    10. Malapit, Hazel Jean L., 2012. "Why do spouses hide income?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(5), pages 584-593.
    11. Lee, Jungmin, 2007. "Marriage, the Sharing Rule, and Pocket Money: The Case of South Korea," Economic Development and Cultural Change, University of Chicago Press, vol. 55(3), pages 557-581, April.
    12. Robert A. Pollak, 2005. "Bargaining Power in Marriage: Earnings, Wage Rates and Household Production," NBER Working Papers 11239, National Bureau of Economic Research, Inc.
    13. Libertad González & Berkay Özcan, 2013. "The Risk of Divorce and Household Saving Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 48(2), pages 404-434.
    14. Rainer, Helmut, 2007. "Should we write prenuptial contracts?," European Economic Review, Elsevier, vol. 51(2), pages 337-363, February.
    15. Katarina Nordblom, 2004. "Cohabitation and Marriage in a Risky World," Review of Economics of the Household, Springer, vol. 2(3), pages 325-340, April.
    16. Jon Strand, 2005. "Individual and Household Values of Mortality Reductions with Intrahousehold Bargaining," Journal of Risk and Uncertainty, Springer, vol. 31(2), pages 217-236, September.
    17. Rasul, Imran, 2008. "Household bargaining over fertility: Theory and evidence from Malaysia," Journal of Development Economics, Elsevier, vol. 86(2), pages 215-241, June.
    18. Selma Walther, 2017. "Moral hazard in marriage: the use of domestic labor as an incentive device," Review of Economics of the Household, Springer, vol. 15(2), pages 357-382, June.

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    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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