Wednesday, September 18, 2013

Negotiating at Home

Household members have to decide how to allocate the resources they hold in common. Newlyweds might believe they will always agree on everything, and while few really become jaded, over the years most couples become somewhat disabused of this notion. Spending more on fishing trips, alcohol, and sporting events (traditionally male consumption) necessarily means spending less on romantic getaways, beauty products, and redecorating (traditionally female consumption). While the observance of gender differences verges close to, or into, sexism, these differences can be exploited to study bargaining power. Deciding where to make the split among gender-oriented spending may require some husband-wife bargaining.

This is exactly what Shing-Yi Wang thought when studying the effects of the assignment of housing property rights in China. If these rights go to either the husband or to the wife, then their bargaining position is improved relative to their spouse. Lo and behold, the household consumption of cigarettes and alcohol (male-favored goods) and the allocation household chores (female-favored duties) follow as one would expect from a non-strategic bargaining model.


  1. "...increased household consumption of some male-favored goods and women's time spent on chores. Transferring ownership rights to women decreased household consumption of some male-favored goods." Notice it DIDN'T say that women did less household chores even if they had the ownership rights - so she didn't get as much out of the deal as the man.

  2. While this does seem sexist, in pure economic terms, this is a great example of how to use game theory in bargaining, in this case, for household resources. This would be a more non-strategic view that acknowledges that real life negotiations don’t have fixed rules as formal games do, this view postulates that the alternatives to agreement determine the terms of the agreement, regardless of the rules of the negotiating games. (Froeb, 2014) If the husband or wife can increase their significant other’s relative gain, or decrease their won, they can gain a bigger share of “the pie.” Although another rule that should be follow is: A happy wife equals a happy life! I don’t think splitting down the middle is a bad thing- why does there have to be a divide based on gender? What about same sex marriages?