The Optimal Reservation Utility in Models of Decision Making in Arranged Marriages
Posted: 14 Dec 2009
Date Written: December 11, 2009
The notion of a reservation quality or utility is a key feature of Batabyal’s (2003a) recent analysis of decision making in arranged marriages. In this model, the magnitude of the reservation utility has a non-trivial impact on the decision to accept or decline a marriage proposal. Even so, Batabyal (2003a) treats the marrying agent’s reservation utility as an exogenous variable. Consequently, the purpose of this paper is to endogenize the reservation utility variable in the context of a dynamic and stochastic model of decision making in arranged marriages. Our analysis leads to two results. First, we demonstrate that the optimal reservation utility is the solution to a particular maximization problem. Second, we show that theoretical circumstances exist in which the optimal reservation utility is unique.
Keywords: Arranged Marriage, Decision Making, Optimal Reservation Utility, Uncertainty
JEL Classification: D81, J12
Suggested Citation: Suggested Citation