Abstract
In this paper we focus on a married couple and analyze a game of marital infidelity. The husband can either be faithful to or cheat on his wife. The wife decides how much effort to expend monitoring her husband and she chooses monitoring effort m∈[0,1]. Our analysis of this strategic interaction leads to five results. First, we solve for the optimal m when the wife believes that her husband is certainly cheating on her. Second, we solve for the optimal m when the wife believes that her husband is faithful for sure. Third, given that the wife believes her husband is faithful with probability p, we determine the best response level of m as a function of p. Fourth, we explain why there is no pure strategy Nash equilibrium in the game between the husband and the wife. Finally, we show that there exists a mixed strategy Nash equilibrium in the same husband-wife game.
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