Marriage as a Rat Race: Noisy Pre-Marital Investments with Assortative Matching

V Bhaskar and Ed Hopkins

No 8529, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study the incentives of parents to invest in their children when these investments improve their marriage prospects, in a frictionless marriage market with non-transferable utility. Stochastic returns to investment eliminate the multiplicity of equilibria that plagues models with deterministic returns, and ensure that a unique equilibrium often exists. Equilibrium investment is efficient when there is complete symmetry between the sexes. However, when there is any asymmetry between the sexes, including an unbalanced sex ratio, investments are generically excessively relative to Pareto-efficiency. Our model can be used for examine several implications of gender differences. For example, if shocks are more variable for boys than for girls, girls will invest more than boys. If there is an excess of boys, then there is parental over-investment in boys and under-investment in girls, and total investment will be excessive.

Keywords: Assortative matching tournament; Ex ante investments; Gender differences; Marriage; Sex ratio. (search for similar items in EconPapers)
JEL-codes: C72 C78 D62 H31 J12 (search for similar items in EconPapers)
Date: 2011-08
New Economics Papers: this item is included in nep-dem
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Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Marriage as a Rat Race: Noisy Premarital Investments with Assortative Matching (2016)
Working Paper: Marriage as a Rat Race: Noisy Pre-Marital Investments with Assortative Matching (2011)
Working Paper: Marriage as a Rat Race: Noisy Pre-Marital Investments with Assortative Matching (2011)
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