> Date: Sat, 01 Sep 2001 19:59:52 -0400
> From: Christopher Rhoades Dÿkema <crdbronx at erols.com>
> To: lbo <lbo-talk at lists.panix.com>
> Cc: gregory.hess at oberlin.edu
> Subject: an economist's view of marriage
> Reply-to: lbo-talk at lists.panix.com
> This is interesting, but it leaves out an important question, namely,
> how does this relate to the choice between legal marriage and
> cohabitation. Probably, according to this model, the weaker party in a
> hedge situation, (if I am really being successful in thinking myself
> into econ-think) would feel an inchoate and probably unconscious impulse
> to actually marry so as to maximize the time that would elapse until the
> other party would recruit his/her forces so as to act on the impulse to
> end the relationship by divorce.
>
>
> > Date: Sat, 1 Sep 2001 12:58:56 -0400
> > From: Doug Henwood
> > Subject: an economist's view of marriage
> >
> > [it's so hard to tell if these are intended as parodies...]
> >
> > "Marriage and Consumption Insurance: What's Love Got to Do With
> > It?"
> >
> > BY: GREGORY D. HESS
> > Oberlin College
> > CESifo (Center for Economic Studies and Ifo
> > Institute for Economic Research)
> >
> > Document: Available from the SSRN Electronic Paper Collection:
> > http://papers.ssrn.com/paper.taf?abstract_id=277284
> >
> > Other Electronic Document Delivery:
> > http://www.CESifo.de
> > SSRN only offers technical support for papers
> > downloaded from the SSRN Electronic Paper Collection
> > location. When URLs wrap, you must copy and paste
> > them into your browser eliminating all spaces.
> >
> > Paper ID: CESifo Working Paper Series No. 507
> > Date: June 2001
> >
> > Contact: GREGORY D. HESS
> > Email: Mailto:gregory.hess at oberlin.edu
> > Postal: Oberlin College
> > Oberlin, OH 44074 USA
> >
> > Paper Requests:
> > Hardcopies For Libraries: contact Gertraud Porak, Postal: CESifo
> > Inc., Poschinger Str. 5, 81679 Munich, Germany.
> > Mailto:porak at CESifo.de http://www.CESifo.de
> >
> > ABSTRACT:
> > This paper explores the role of marriage when markets are
> > incomplete so that individuals cannot diversify their
> > idiosyncratic labor income risk. Ceteris paribus, an individual
> > would prefer to marry a "hedge" (i.e., a spouse whose income is
> > negatively correlated with her own) as it raises her expected
> > utility. However, the existence of love complicates the picture:
> > while marrying a hedge is important, an individual may not do so
> > if she finds someone with whom she shares a great deal of love.
> > Is love more important to a lasting marriage than economic
> > compatibility? To answer this question, I develop a simple model
> > where rational individuals meet, enjoy the economic and
> > non-pecuniary benefits of marriage (i.e., love), and then must
> > decide whether to remain married or divorce.
> >
> > The model predicts that if love is persistent and the
> > resolution of uncertainty to agents' income is early, then those
> > who in fact married hedges (and for good reason) are the ones
> > most likely to be caught short with too little love in order to
> > save a marriage in the event of an adverse shock. Consequently,
> > under these conditions individuals who are good hedges for one
> > another are more likely to marry one another, although once
> > married, they will be more likely to divorce. In contrast, if
> > love is temporary (in the sense of reverting to a common mean)
> > and the resolution of uncertainty to agents' income is
> > predominantly later, then those who in fact marry hedges will in
> > fact be less likely to subsequently divorce. Evidence is
> > provided to distinguish which of these alternative scenarios is
> > in support of these aspects of the decision to stay married.
> > Additional hypotheses regarding the effect of differences in the
> > expected means and volatilities of partners' incomes are also
> > derived from the theory and tested.
>
> Also, I wonder how such thinkers handle the issue of unconscious
> experience. It's hard to imagine that even economists would see "love"
> as a wholly conscious process. Do they think they can get by only by
> measuring the results? I am copying this to the original author, in the
> hope that he can elucidate some of these points.
>
> Christopher Rhoades Dÿkema
>
>
>