Intrafamily Bargaining and Household Decisions by Notburga Ott

By Notburga Ott

A version of family judgements in response to a bargaining strategy is constructed supplying a complete framework for the research of relations habit. Treating the kin as an fiscal association, family habit is defined through the cooperation of software maximizing contributors. the adaptation to standard microeconomic family types is that theassumption of a joint family application functionality is deserted. rather than this, a online game theoretic technique is used to version kin judgements due to intrafamily bargaining. contemplating the advance of the spouses` human capital in a dynamic strategy, the long term results of intrafamily specialization in industry paintings and earn a living from home are analyzed. Onemajor discovering is that during a dynamic environment non-Pareto effective allocations can result. Empirical checks reveal the relevanace of the bargaining approach.

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Therefore. many different threat pOints with partial non-cooperative behavior are possible. 27 Surely. in reality not always an equilibrium point will be chosen as threat point for the cooperative game. because the moves and countermoves of the threat game are a real turning out process which requires time. But in the same time the partner bargain also about a cooperative outcome. Therefore. in the short run suboptimal threats may be chosen. But in the long run we should expect that the threats are mutually best replies.

The conflict point plays an essential role in selecting the optimal solution. Because the player who would lose more in the case of disagreement is more likely to make concessions. disagreement can be used as a 'threat' in the bargaining process in order to gain the most favorable distribution. Therefore. this point is also called the threat point. 20 Harsanyt (1979) even postulates. that only the criterium of enforceable commitments should be used for the distinction between coopemtive and non-coopemtive games.

23 If the players do not choose their strategies simultaneously and at least one of them is allowed to use a strategy that depends on previous actions, the game is called dynamic. The property of 'subgame perfectness' is then required. Only a dynamic non-cooperative model can describe the negotiation process itself because action, reaction and learning processes must be considered. Nevertheless, if the solution of a static game is identical with the fmal outcome of a dynamic approach, the static model is sufficient for many questions.

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