Pierre André Chiappori (Columbia) "Family Economics" - Cemmap

250 6. Uncertainty and Dynamics in the Collective model
happy marriage indeed.
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no
wife
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husband
divorce stay
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FIGURE 6.1. Game tree for investment in education
Somewhat different considerations arise when we look at ‘end game’ situations
in which the spouse has no chance to reciprocate. A sad real example
of this sort is when the husband has Altzheimer’s and his wife takes care of
him for several (long) years, expecting no repayment from him whatsoever
as he does not even know her. Here, the proper assumption appears to be
that she believes that he would have done for her the same thing had the
roles been reversed. Unfortunately, the consistency of such beliefs is impossible
to verify. Another possibility is that she cares about him and about her
children that care about him to the extent that caring for the sick husband
in fact gives her satisfaction. In either case, some emotional considerations
must be introduced to justify such cases of unselfish behavior in families.
The commitment issue is complex. In the end, whether agents are able to
implement and enforce a sufficient level of commitment to achieve ex ante
efficiency is an empirical issue. Our task, therefore, is to develop conceptual
tools that allow a precise modeling of these problems, and empirical
tests that enable us to decide whether, and to what extent, the lack of
commitment is an important problem for household economics.
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