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Why Don’t You Leave? A Household Bargaining Model with a Household Preference of Addiction

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  • Teresa Perry

    (California State University- San Bernardino)

Abstract

This paper introduces a household model of addiction that focuses on how a breakdown point, derived from non-cooperative and collective model outcomes, diverges with variations in the spousal preference for household addiction (PHA). The model reveals that in households with different PHAs between the husband and wife, the spouse with the negative PHA will garner higher utility from the collective outcome. When a spouse has a negative PHA, an increase in their relative decision power will decrease the consumption of the addictive good for the other partner. The model highlights a few reasons why people stay in addiction-affected households.

Suggested Citation

  • Teresa Perry, 2024. "Why Don’t You Leave? A Household Bargaining Model with a Household Preference of Addiction," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 50(3), pages 307-336, June.
    • Handle: RePEc:pal:easeco:v:50:y:2024:i:3:d:10.1057_s41302-024-00274-5
    DOI: 10.1057/s41302-024-00274-5
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    References listed on IDEAS

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    1. Kerry Anne McGeary, 2015. "Spousal Effects in Smoking Cessation: Matching, Learning, or Bargaining?," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 41(1), pages 40-50, January.
    2. Dirk Bethmann & Robert Rudolf, 2018. "Happily ever after? Intrahousehold bargaining and the distribution of utility within marriage," Review of Economics of the Household, Springer, vol. 16(2), pages 347-376, June.
    3. Pierre-Andre Chiappori & Maurizio Mazzocco, 2017. "Static and Intertemporal Household Decisions," Journal of Economic Literature, American Economic Association, vol. 55(3), pages 985-1045, September.
    4. Orphanides, Athanasios & Zervos, David, 1995. "Rational Addiction with Learning and Regret," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 739-758, August.
    5. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December.
    6. Amanda J Felkey, 2013. "Husbands, Wives and the Peculiar Economics of Household Public Goods," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 25(3), pages 445-465, July.
    7. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
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    9. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-349, June.
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    More about this item

    Keywords

    Collective model; Addiction; Non-cooperative model;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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