The Good Wife? Reputation Dynamics and Financial Decision-Making inside the Household

Nina Buchmann, Pascaline Dupas and Roberta Ziparo

American Economic Review, 2025, vol. 115, issue 2, 525-70

Abstract: We study reputation dynamics within the household in a setting where women regularly receive transfers from their husbands for household purchases. We propose a signaling model in which wives try to maintain a good reputation in the eyes of their husbands to receive high transfers. This leads them to (i) avoid risky purchases (goods with unknown returns) and (ii) knowingly overuse low-return goods to hide bad purchase decisions—we call this the intrahousehold sunk cost effect. We present supportive evidence for the model from a series of experiments with married couples in rural Malawi.

JEL-codes: D13 D82 J12 J16 O12 O18 (search for similar items in EconPapers)
Date: 2025
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Working Paper: The Good Wife? Reputation Dynamics and Financial Decision-Making Inside the Household (2023)
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DOI: 10.1257/aer.20230393

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