Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining

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Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining

Please use this identifier to cite or link to this item: http://hdl.handle.net/10355/2724

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Title: Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining
Author: Aura, Saku, 1971-
Keywords: marriage
relationship dynamics
commitment
divorce
Date: 2002
Publisher: Department of Economics
Citation: Department of Economics, 2002
Series/Report no.: Working papers (Department of Economics);WP 02-17
Abstract: This paper studies married couple's 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.
URI: http://hdl.handle.net/10355/2724

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  • Economics publications (MU) [120]
    The items in this collection are the scholarly output of the faculty, staff, and students of the Department of Economics.

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