Noncooperative Bargaining Models of Marriage

In this paper we discuss some simple noncooperative models of distribution within marriage in which the equilibria are not necessarily Pareto optimal, in which history and culture can affect which equilibrium is realized, and in which distribution may depend on whether resources are controlled by the husband or by the wife. Recent moves away from single-decision-maker models of the family have permitted economists to address distribution within marriage, and cooperative-bargaining models have played the central role in these moves. The next step is to permit strategic interaction between family members, by modeling distribution within marriage as a noncooperative game. Noncooperative game theory allows great flexibility in specifying the rules of the game and, unlike cooperative game theory, imposes few a priori restrictions on the nature of equilibrium outcomes. In particular, noncooperative models neither assume nor imply that all equilibria are Pareto optimal.