Events at CERGE-EI

Roberta Ziparo, Ph.D.

Aix-Marseille University, France

Abstract: Bargaining power within the couple is often proxied in surveys by measures of who has a say in the decisions: the more a couple interacts about choices the more the bargaining power is considered balanced within the couple. However, joint decision making could also reflect non-aligned preferences among partners: using first hand data from Cameroon we see that more aligned couples know less about each other’s resources and delegate more.
To explore this pattern, we develop the first theoretical framework that studies optimal decision structure in the household. We analyse how the degree of preference alignment and the differences in the opportunity costs of time determine when delegation or negotiation is preferable. We derive testable prediction about optimal decision structure and welfare. Delegation is observed when the (opportunity) cost of participating in the decision is higher than the preference gap between spouses. Welfare is higher when delegation occurs but lower for the spouse who receives authority.  We test the predictions in two experiments conducted among couples in Belgium and France, and Benin.