TITLE:
Which Spouse First Decides in the Household? The Dynamics of Bargaining
AUTHORS:
Joaquín Andaluz Funcia, Miriam Marcén, José Alberto Molina Chueca
KEYWORDS:
Family Bargaining; Stackelberg Game; Family Good
JOURNAL NAME:
Theoretical Economics Letters,
Vol.3 No.1,
February
26,
2013
ABSTRACT: This paper examines the effects of which spouse first decides in the intrahousehold decision on the time that each spouse devotes to the provision of a family good. Specifically, we adopt a dynamic approach by developing a supergame, with the status quo being sequential, to study the influence of the discount factor, which measures the importance of the future, on the set of sustainable agreements in intrahousehold bargaining. We first show that cooperation is easily sustained. We then observe a positive relationship between the discount factor and the proportion of time that the follower devotes to housework, when focusing on sustainable agreements, with this finding being maintained even if the follower has higher wages than the spouse leader.