We develop a model of the household in which spousal incomes are determined by pre-marital 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...

The labor economics literature has shown that the "efficient bargaining" model, in which wage and employment are negotiated simultaneously, is less frequently used on unionized markets than the less efficient "right-to-manage" model, in which wage is determined via bargaining and employment...

Can households make efficient choices? The fact that cohabitation and marriage are partnerships for joint production and consumption imply that their gains are highest when household members cooperate. At the same time, empirical findings suggest that spousal specialization and labor force...

We model monopsony on the labor market using a separable matching model a la Choo and Siow (2006). We propose a simple method that estimates 1) the multidimensional determinants of productivity and non-wage preferences separately and 2) the variance of unobserved heterogeneity on both sides of...

In this article, we use a stylized model of the labor market to investigate the effects of three alternative and well-known bargaining solutions. We apply the Nash, the Egalitarian and the Kalai-Smorodinsky bargaining solutions in the small firm's matching model of unemployment. To the best of...

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 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...

In the context of the Beckerian theory of marriage, when men and women match on a single-dimensional index that is the weighted sum of their respective multivariate attributes, many papers in the literature have used linear canonical correlation, and related techniques, in order to estimate...

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...

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...