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Divorce costs and marital dissolution in a one-to-one matching framework with nontransferable utilities

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  • Saglam, Ismail

Abstract

In this paper, we use a two-period one-to-one matching model with incomplete information to examine the effect of changes in divorce costs on marital dissolution. Each individual who has a nontransferable expected utility about the quality of each potential marriage decides whether to marry or to remain single at the beginning of the first period. Those who married in the first period learn the qualities of their marriages at the beginning of the second period and then decide whether to stay married or to unilaterally divorce. We show that for any society, there exist matching environments where the probability of the marital dissolution is not decreasing in divorce costs under a gender-optimal matching rule. In such environments an allocation effect of divorce costs with ambiguous sign outweighs an incentive effect which is always negative.

Suggested Citation

  • Saglam, Ismail, 2011. "Divorce costs and marital dissolution in a one-to-one matching framework with nontransferable utilities," MPRA Paper 33841, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:33841
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    References listed on IDEAS

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    1. Peters, H Elizabeth, 1986. "Marriage and Divorce: Informational Constraints and Private Contracting," American Economic Review, American Economic Association, vol. 76(3), pages 437-454, June.
    2. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-1187, December.
    3. Crawford, Vincent P & Rochford, Sharon C, 1986. "Bargaining and Competition in Matching Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(2), pages 329-348, June.
    4. Spiros Bougheas & Yannis Georgellis, 1999. "The effect of divorce costs on marriage formation and dissolution," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(3), pages 489-498.
    5. Imran Rasul, 2006. "Marriage Markets and Divorce Laws," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 22(1), pages 30-69, April.
    6. Leora Friedberg, 1998. "Did Unilateral Divorce Raise Divorce Rates? Evidence from Panel Data," NBER Working Papers 6398, National Bureau of Economic Research, Inc.
    7. González, Libertad & Viitanen, Tarja K., 2009. "The effect of divorce laws on divorce rates in Europe," European Economic Review, Elsevier, vol. 53(2), pages 127-138, February.
    8. Justin Wolfers, 2006. "Did Unilateral Divorce Laws Raise Divorce Rates? A Reconciliation and New Results," American Economic Review, American Economic Association, vol. 96(5), pages 1802-1820, December.
    9. Ayse Mumcu & Ismail Saglam, 2008. "Marriage Formation/Dissolution and Marital Distribution in a Two-Period Economic Model of Matching with Cooperative Bargaining," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 11(4), pages 1-3.
    10. Allen, Douglas W, 1992. "Marriage and Divorce: Comment," American Economic Review, American Economic Association, vol. 82(3), pages 679-685, June.
    11. Jonathan Gruber, 2004. "Is Making Divorce Easier Bad for Children? The Long-Run Implications of Unilateral Divorce," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 799-834, October.
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    Cited by:

    1. Lyndon Walker & Peter Davis, 2013. "Modelling "Marriage Markets": A Population-Scale Implementation and Parameter Test," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 16(1), pages 1-6.
    2. Ismail Saglam, 2014. "Simple Heuristics as Equilibrium Strategies in Mutual Sequential Mate Search," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 17(1), pages 1-12.
    3. Naoki Shiba, 2013. "Analysis of Asymmetric Two-Sided Matching: Agent-Based Simulation with Theorem-Proof Approach," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 16(3), pages 1-11.

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    More about this item

    Keywords

    One-to-one matching; marriage dissolution; divorce; incomplete information;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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