Intrafamily Bargaining and Household Decisions

ISBN-13: 9783642457104 / Angielski / Miękka / 2012 / 242 str.

Notburga Ott

Opis

A model of household decisions based on a bargaining approach is developed providing a comprehensive framework for the analysis of family behavior. Treating the family as an economic organization, household behavior is explained by the cooperation of utility maximizing individuals. The difference to traditional microeconomic household models is that theassumption of a joint household utility function is abandoned. Instead of this, a game theoretic approach is used to model family decisions as a result of intrafamily bargaining. Considering the development of the spouses human capital in a dynamic approach, the long-term effects of intrafamily specialization in market work and work at home are analyzed. Onemajor finding is that in a dynamic setting non-Pareto efficient allocations may result. Empirical tests demonstrate the relevanace of the bargaining approach.

Spis treści

1 Introduction.- 2 Models of the ‘new home economics’.- 2.1 Decisions in an existing family.- 2.1.1 Labor supply models.- 2.1.2 Simple time allocation models.- 2.1.3 Extensions of time allocation models.- 2.1.4 Models of fertility.- 2.1.5 Empirical evidence.- 2.1.6 Remarks on household utility function.- 2.2 Family formation and marital stability.- 2.2.1 Marriage models.- 2.2.2 Models of marriage stability.- 2.2.3 Empirical evidence.- 2.3 Problems and further questions.- 3 Family decisions as a bargaining problem.- 3.1 The family as an organization of exchange.- 3.2 Household decisions as a non-cooperative game.- 3.3 Household decisions as a cooperative game.- 4 A Nash bargaining model for household decisions.- 4.1 Comparison with traditional approaches.- 4.2 Comparative statics.- 5 Time allocation in a static bargaining model with household production.- 5.1 The model.- 5.2 Division of work within the household.- 5.2.1. The case of a joint net-income function.- 5.2.2 The case of individual net-income functions.- 5.3 Effects of an exogenous change in wages.- 5.3.1 Effects when the conflict point is held constant.- 5.3.2 The bargaining effect.- 5.3.3 The total effect.- 6 A dynamic model with accumulation of human capital.- 6.1 Intrafamily division of work and accumulation of human capital.- 6.2 The dynamic approach.- 6.2.1 Game with binding long-term contracts.- 6.2.2 Game without binding long-term contracts.- 6.2.3 The two-period model.- 6.3 Time allocation depending on individual bargaining power.- 6.3.1 Labor supply.- 6.3.2 Intrafamily division of work.- 7 Pareto efficiency of family decisions.- 7.1 Binding force of contracts and efficiency.- 7.2 Discrete choices.- 7.3 Fertility as a prisoner’s dilemma.- 8 The binding force of intrafamily contracts.- 8.1 Self-enforcing contracts.- 8.1.1 Threat by future non-cooperative behavior.- 8.1.2 Reputation.- 8.1.3 Loyalty.- 8.2 Enforcement by institutions.- 8.2.1 The formal marriage contract.- 8.2.2 Divorce law.- 8.2.3 Social norms.- 8.3 Remarks on policy options.- 9 Introducing uncertainty: the possibility of conflict.- 9.1 Exogenous probability of conflict.- 9.2 Causes of conflict and negotiation strategies.- 9.3 Endogenous probability of conflict.- 9.3.1 Conflict probability and wage changes.- 9.3.2 Time allocation and conflict probability.- 10 Empirical tests of the bargaining approach.- 10.1 Tests based on the Slutsky restrictions.- 10.1.1 Derivation of testable hypotheses.- 10.1.2 Empirical results of Manser/Brown and Horney/McElroy.- 10.1.3 Some critical remarks.- 10.2 Test of Pareto efficiency.- 10.2.1 The parametric approach.- 10.2.2 The non-parametric approach.- 11 Survey of empirical bargaining models.- 11.1 Household labor supply: a model with fixed bargaining power.- 11.2 Household labor supply: a game theoretic model in a discrete choice setting.- 11.3 The distribution of welfare in the household: measuring the bargaining power.- 11.4 Marriage and divorce: estimates with explicit threat point.- 12 Empirical evidence of the bargaining approach - first findings with German data.- 12.1 Balance of power within marriages.- 12.2 Fertility decision.- 12.3 Divorce behavior.- 13 Concluding remarks.