Working Paper
Is Marriage as Good as a Contract?
Alessandro Cigno
CESifo, Munich, 2013
CESifo Working Paper No. 4555
CESifo, Munich, 2013
CESifo Working Paper No. 4555
Neither marriage nor a legally enforceable contract serves any useful purpose if the parties have access to a perfect credit market. In the presence of credit rationing, efficiency and utility equalization are guaranteed only by a legally enforceable contract. Separate-property marriage may reduce and community-property marriage actually eliminate inefficiency, but neither of them guarantees utility equalization.
CESifo Category
Social Protection
Social Protection
Keywords: contracts, hold-up problem, separate-property marriage, community-property marriage, divorce legislation
JEL Classification: C780, J120, K360