ECON451 Lecture Notes - Lecture 7: Coase Theorem, Dont, European Cooperation In Science And Technology
9 Aug 2016
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Document Summary
Marriage establishes a set of entry conditions. Cultural remnant (almost religiously inclined), business reasons (a whole industry based off), legal reasons, tax reasons, Scholars who do analysis on marriage law as if the same as any other contract marriage is considered a default contract. Two time periods explain, don"t know where this came from. In period 1 make a marriage decision. Return on investment is higher if still together in second period. There are random (negative or positive) shocks to match specific utility divorce results from negative shocks to match specific utility. Divorce happens when the negative random shock to match specific utility is big enough. Divorce is efficient if both people can be made better off divorced when divorced. If the sum of both utilities when divorced is greater than when married having one person have enough utility for the both of them to make it efficient is okay.
