Explain the fact that unilateral divorce law

Assignment Help Business Economics

Reference no: EM137769

Q. Suppose there are two types of men and two types of women (Good/Bad), and assume further that same-sex marriage is not allowed in this society. The payoffs of the marriage are given by the table below:

Good Wife Bad Wife
Good Husband (2,2) (-1/2,1)
Bad Husband (1/2, -1) (-1,-1)

Suppose the percentage of good wives is a, and of good husbands is b, and b > a. Further assume that people have no idea of their spouse's type before they get married, and one's type is independent of the spouse's type. Single people receive a payoff of 0. Assume people cannot get divorced.

a) What is the socially efficient allocation of wives and husbands in this society (the percentage of each combination of marriages that maximizes social welfare)? Compute the efficient total social welfare.

b) Given the random way in which marriages are formed, what will be the distribution of types of marriages? Compute the total social welfare, and show that it is lower than under the efficient allocation.

Now assume people can get divorced unilaterally.

c) What is the divorce rate if transaction costs are zero? What if transaction costs are high enough that husbands and wives cannot bargain?

d) Can this model explain the fact that unilateral divorce law increased the divorce rate temporarily? What about the fact that long run divorce rates remained the same?

e) Now assume there are 10, 000 couples that get married each year. Before the unilateral divorce law, inefficient marriages divorce after one year of bargaining. Assume bargaining itself doesn't affect payoffs. What are the short run and long run effects of a unilateral divorce law?

Reference no: EM137769

Questions Cloud

Factors that will allow them to increase their added value : What are the factors that will allow them to increase their added value in this type of competitive environment.

Examine the personal goals of children : Subjects at both sites were classified as dropouts if they left the study before the conclusion, or completers if they finished the study

What is an angular velocity of the stick : A hockey stick is swung with an average angular acceleration of 1.5 rad/s2. What is an angular velocity of the stick when it strikes the ball at the end of 0.8 second swing.

Real wages produce about same pace as labor productivity : Over the long run historically, real wages produce about same pace as labor productivity.

Explain the fact that unilateral divorce law : Can this model explain the fact that unilateral divorce law increased the divorce rate temporarily.

What will be its radius of curvature : A doubly charged helium atom whose mass is 6.6 10 to 27 kg is accelerated by a voltage of 2200 V. What will be its radius of curvature if it moves in the plane perpendicular to a uniform 0.308 T field?

General pattern of the us income distribution : What s the general pattern of the US income distribution over the last century. Explain about the timing of the changes.

Decrease in demand for bridge and tunnel crossings : With the decrease in demand for bridge and tunnel crossings, what is the optimal way to adjust tolls: raise tolls, lower tolls, or leave unchanged.

Total demand will the follower firms supply : What is the total market demand for poly-glue at the price established by Alchemy. How much of the total demand will the follower firms supply.

User Account

All Pages