On the sustainability of bargaining solutions in family decision models |
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Authors: | Joaquín Andaluz José Alberto Molina |
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Affiliation: | (1) Department of Economic Analysis, University of Zaragoza, Zaragoza, Spain;(2) Institute for the Study of Labour-IZA, Bonn, Germany |
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Abstract: | This paper analyses the sustainability of family bargaining agreements by developing a non-cooperative game between two spouses with symmetric preferences. To that end, we develop, by using a general utility function, a repeated non-cooperative game involving two players with symmetric preferences, where the characterization of a Nash sub-game perfect equilibrium allows us to demonstrate that the spouse with the greater bargaining power has a greater incentive to reach an agreement. This result is also reproduced by using a particular example of linear preferences in consumption. However, the influence of the bargaining power on the sustainability of a bargaining solution depends on the specification of the individual preferences, as well as the degree of altruism between the spouses. |
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Keywords: | Family bargaining Sustainability of agreements Efficiency |
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