The Bargaining Family Revisited
Canadian Journal of Economics, Vol. 33, Issue 2, May 2000
Posted: 19 Jun 2001
We suggest a family bargaining model where human capital investment decisions are made non-cooperatively in a first stage, while day-to-day allocation of time is determined later through Nash bargaining, but with non-cooperative behaviour as the fall-back. One finding is that overinvestment in education may be even more of a problem in such a semi-cooperative model than in a fully non-cooperative one. Even though both the semi-cooperative model and the fully non-cooperative model predict overinvestment in education, policy conclusions that follow from the two models are distinctly different.
JEL Classification: D13, J24
Suggested Citation: Suggested Citation