Topics in Economic Theory I
Friday, Jan. 4, 2019 8:00 AM - 10:00 AM
- Chair: Ayca Kaya, University of Miami
Credibility of Crime Allegations
AbstractThe lack of hard evidence in allegations about sexual misconduct makes it difficult to separate true allegations from false ones. We provide a model in which victims and potential libelers face the same costs and benefits from making an allegation, but the tendency for perpetrators of sexual misconduct to engage in repeat offenses allows semi-separation to occur, where a true victim reports with a higher probability than a libeler does. Our model also explains why reports about sexual misconduct are often delayed, and why the public rationally assigns less credibility to these delayed reports than to those that are delayed.
Don’t Sweat the Small Stuff: Intra-household Earning Distribution and Marriage Durability
AbstractWe consider a dynamic intra-household bargaining model without commitment, with a view to determining how the mean duration of the partnership depends on the distribution of the partners’ labor market earnings. Each partner’s utility is derived from private consumption and from a local public good (LPG). Every period, the partners’ valuations of the LPG evolve according to Markov processes, and the partners have the opportunity to choose to continue the relationship and renegotiate the allocation of private consumption, or to part ways and permanently collect their autarky (private consumption) payoffs.
Utility is partially transferable: private consumption can be transferred most efficiently with money, but the extent of such transfers is limited by the size of the partners’ earnings; other means of transfer, such as favors or household produced goods, entail an aggregate utility loss.
We characterize equilibria of the infinite dynamic game with a fixed discount factor. The main result is that the maximum expected duration of the partnership is decreasing in the inequality of monetary earnings—provided that the partners’ valuations of the LPG are governed by identical and independent Markov chains.
Massachusetts Institute of Technology
University of Chicago
Washington University-St. Louis
- D8 - Information, Knowledge, and Uncertainty
- D1 - Household Behavior and Family Economics