The Affectionate Society: Does Competition for Partners Promote Friendliness?

Gersbach, Hans; Haller, Hans H.

The Affectionate Society: Does Competition for Partners Promote Friendliness?

40 Pages Posted: 12 Sep 2005

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Hans H. Haller

Virginia Polytechnic Institute & State University - Department of Economics

There are 2 versions of this paper

Date Written: May 2005

Abstract

We study household formation in a model where collective consumption decisions of a household depend on the strategic choices of its members. The surplus of households is determined by individual choices of levels of friendliness to each other. A strategic conflict arises from a coupling condition that ceteris paribus, a person's friendlier attitude reduces the individual's influence in the household's collective decision on how to divide the ensuing surplus. While partners in an isolated household choose the minimum level of friendliness, competition for partners tends to promote friendliness. We find that affluence does not buy affection, but can lead to withholding of affection by an affluent partner who can afford to do so. In general, the equilibrium degree of friendliness proves sensitive to the socio-economic composition of the population.

Keywords: Friendliness, coupling condition, collective decisions, competition for partners, socio-economic composition

JEL Classification: D13, D50, D70, J10

Suggested Citation: Suggested Citation

Gersbach, Hans and Haller, Hans H., The Affectionate Society: Does Competition for Partners Promote Friendliness? (May 2005). CEPR Discussion Paper No. 5030. Available at SSRN: https://ssrn.com/abstract=774104