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Games 2013, 4(1), 106-124; doi:10.3390/g4010106

Divorce Costs and Marital Dissolution in a One-to-One Matching Framework With Nontransferable Utilities

Department of Economics, TOBB University of Economics and Technology, Sogutozu Cad. 43,Sogutozu, Ankara 06560, Turkey
Received: 14 December 2012 / Revised: 23 February 2013 / Accepted: 4 March 2013 / Published: 20 March 2013
(This article belongs to the Special Issue Games and Matching Markets)
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Abstract

In this paper, we use a two-period one-to-one matching model with incomplete information to examine the effect of changes in divorce costs on marital dissolution. Each individual who has a nontransferable expected utility about the quality of each potential marriage decides whether to marry or to remain single at the beginning of the first period. Individuals married in the first period learn the qualities of their marriages at the beginning of the second period and then decide whether to stay married or to unilaterally divorce. We show that, for any society, there exist matching environments where the probability of the marital dissolution does not reduce divorce costs under gender-optimal matching rules. In such environments, an allocation effect of divorce costs with an ambiguous sign outweighs an incentive effect that is always negative. We also show that these results may also arise under stable matching rules that are not gender optimal.
Keywords: One-to-one matching; stability; marriage dissolution; divorce; incomplete information One-to-one matching; stability; marriage dissolution; divorce; incomplete information
This is an open access article distributed under the Creative Commons Attribution License (CC BY 3.0).

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MDPI and ACS Style

Saglam, I. Divorce Costs and Marital Dissolution in a One-to-One Matching Framework With Nontransferable Utilities. Games 2013, 4, 106-124.

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