We experimentally investigate multiple notions of equity in ultimatum bargaining with asymmetric outside options. Building on the generalized equity principle formulated by Selten (1978), we derive three different equity rules that can explain 43% of all offers. Our within-subject design further...

The paper provides a theoretical foundation for the empirical regularities observed in estimations of wage consequences of overeducation and undereducation. Workers with more education than required for their jobs are observed to suffer wage penalties relative to workers with the same education...

An important paper by Chiappori et al. (2012) has proposed an elegant and parsimonious model of spousal matching over multi-dimensional characteristics. Importantly, the model suggests specific testable assumptions that allow researchers to uncover marginal rates of substitution (MRS) between...

The undersupply of spots in German daycare facilities for toddlers challenges parents' possibilities to work. To ease the situation, the government implemented a new law entitling every child between ages one and three to daycare supervision for about four hours per day. Nevertheless, the...

Consider a model of bargaining, in which two players, 1 and 2, share a pie of size y. The bargaining environment is described by a set of parameters ? that may affect agents’ preferences over the agreement sharing, the status quo outcome, or both. The outcomes (i.e., whether an agreement is...

In many markets, sellers advertise their good with an asking price. This is a price at which the seller is willing to take his good off the market and trade immediately, though it is understood that a buyer can submit an offer below the asking price and that this offer may be accepted if the...

We develop a novel framework to analyze the structural implications of the marriage market for household consumption patterns. We start by defining a revealed preference characterization of efficient household consumption when the marriage is stable. In particular, stability means that the...

We develop a model of the household in which spousal incomes are determined by premarital investments, the marriage market is characterized by assortative matching, and endogenously-determined sharing rules form the basis of intra-household allocations. By incorporating pre-marital investments...

We report the results of a field experiment with bicycle messengers in Switzerland and the United States. Messenger work is individualized enough that firms can choose to condition pay on it, but significant externalities in messenger behavior nonetheless give their on-the-job interactions the...

This paper develops a model of child custody based on an incomplete-contract approach to the allocation of property rights. Because of the presence of transaction costs in marriage, altruistic parents cannot contract upon the investments they make into their children, but can reduce the...