School of Economics and Finance

No. 454: Does Divorce Law Matter?

Giulio Fella , Queen Mary, University of London
Paola Manzini , Queen Mary, University of London
Marco Mariotti , University of Exeter

March 1, 2002

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In this paper we derive an explicit model of negotiations between spouses when utility is (partially) transferable only in case of separation. We show that inefficient separation may occur in equilibrium even under consensual divorce law. This provides theoretical support for the view that changes in social norms rather than in legislation may be responsible for increasing divorce rates.

J.E.L classification codes: C78, J120

Keywords:Bargaining, Divorce, Non transferability