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    Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining

    Aura, Saku, 1971-
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    [PDF] UncommittedCouples.pdf (286.1Kb)
    Date
    2002
    Format
    Working Paper
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    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
    Part of
    Working papers (Department of Economics);WP 02-17
    Part of
    Economics publications
    Citation
    Department of Economics, 2002
    Collections
    • Economics publications (MU)

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