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Final

ECO332 PAST FINAL.docx

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Department
Economics
Course Code
ECO333H1
Professor
Aloysius Siow

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ECO332 PAST FINAL Question 1 a) The welfare of women in a polygamous relationship is lower than in a monogamous relationship because her bargaining power is lower. Since the larger supply or women than demand for women leads to husbands having more than one wife, he has the bargaining power in this situation. Men having bargaining power increases the male to female ratio of children, the amount of children the family has, and decreases the human capital investment in the children. Assuming that women would prefer to be in a monogamous relationship over a polygamous relationship (because women would not want to share one husband with other women), this means that they would not divorce because they do not have better alternatives (single men). Studies have shown that states that have unilateral divorce compared to states that did not had lower suicide rates, domestic violence, and wife homicide rate. These 3 dependent variables are highly correlated with the welfare of women so that I would argue that polygyny decreases the welfare of women relative to monogamy. Since women accept polygyny, this means that bargaining power is very low for women. This bargaining power is derived from a high demand of husbands and a low demand of wives (assuming that women want to marry to reproduce). Since there is a large difference between demand and supply, search friction in marriage is high. Wives have the option of marrying a husband with multiple wives or waiting for a single husband who will not want multiple wives. However, since the search friction is high, the probability of the second scenario occurring is low so that women will accept their next best option: a polygamous relationship. The cost of waiting and searching is too high for women because their fecund is for a shorter period of their lives than men. If their fecund period was longer, they may be willing to wait for a better husband even though search friction is high. However, since their fecund period is short, it is unattractive to wait since their waiting period is shorter. A transferable marriage model is not possible in a polygyny because an agreed upon marital output division cannot be carried through. This is because the overall marital output is fixed and the husband must decrease the transfer he provides to his original wife in order to marry his next wife. Assuming that the output for remaining single is very low (because women accept polygamous relationships), even a decrease in transfer due sharing with the 2nd wife is higher than the output for remaining single. Depending on whether the value from being single or the lowered transfer from the husband is higher, the wife will decide to divorce or remain in the marriage. Overall, I believe Gary Becker’s statement is dependent on the situation (bargaining power of women caused by demand and supply or men). In situations where bargaining power of women is very low, polygyny increases the welfare of women relative to monogamy assuming that reproduction is the main reason for marriage. In situations where demand and supply of men are about even, bargaining power of women is medium so that it decreases the welfare of women relative to monogamy. “Transferable models of marriages assume that the marital output is flexibly divided between the potential husband and the wife. Moreover the potential husband and the wife knows that the agree upon division of marital output will be carried out in the marriage. Non-transferable models of marriage assume that it is not possible to flexibly divide marital output between a potential husband and wife. That is, there is no credible way for husbands and wives to commit to a particular division of marital output after the output is produced.” From convo: i think of it as in lets imagine first what kind of scenario would be necessary for polygyny to happen. so you have only 2 men in this society of 10 people (8 women). so now sarah has the option of either marry husband 1 or husband 2 or being single and waiting for another guy in this situation since search friction is high (it's rare for another guy to come), and bargaining power is low (because demand for men is high and low for women), and because sarah can only reproduce in period 1, she will like polygymy in this situation ohh and her marital output tao is split between the husband's other wives so she'd prefer monogamy if it was an option situation 2 where 5 girls 5 guys, search friction lower, bargain power moderate, tao is not split in 4s so that monogamy is better than polygamy and being single lol id just say that tao is transfer from husband to wife if he marries more wives, tao doesn't increase but stays the same since
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