Abstract
A model was developed and a static game of complete information was applied in an examination of a married couple’s reciprocal relationship. Each chose best strategies (i.e., optimal responses) to maximize payoffs (i.e., happiness). Theoretical analysis suggests that the couple’s happiness is endogenously and positively correlated and simultaneously determined. If the wife (or the husband) is not happy with the relationship, it is impossible for the husband (or the wife) to be happy with the relationship.
Highlights
The economics literature is replete with studies relating to marriage
The bargaining models found in cooperative game theory investigate how husband and wife bargain for a final allocation, with an outside threat point provided by divorce (e.g., Manser and Brown, 1980 [3]; McElroy and Horney, 1981 [4]; McElroy, 1990 [5]; Lundberg and Pollak, 1993 [6])
The non-cooperative models examine how each spouse voluntarily provides household public goods, choosing actions that are utility-maximizing given the actions of their partner, and the two settle on a Nash equilibrium (e.g., Lundberg and Pollak, 1994 [7])
Summary
The economics literature is replete with studies relating to marriage. For example, Becker’s altruist model (1974 [1], 1991 [2]) looked at how resources are distributed within the family. The bargaining models found in cooperative game theory investigate how husband and wife bargain for a final allocation, with an outside threat point provided by divorce (e.g., Manser and Brown, 1980 [3]; McElroy and Horney, 1981 [4]; McElroy, 1990 [5]; Lundberg and Pollak, 1993 [6]). Lundberg and Pollak (2003) [8] analyze the two-earner-couple location game. We adopt an alternative approach and focus on a different perspective by applying a static game of complete information to analyze how a married couple builds a reciprocal relationship and to determine the Nash equilibrium
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