Modeling Marital Connections among Family Lines

Abstract

This paper examines the role of marital connections in models of intertemporal household behavior. Recent work by Bernheim and Bagwell implies that such connections might vastly expand the scope of neutrality results. The present work studies several formulations including not only marriage but also descriptions of how people choose spouses. Purposeful choices lead to assortative mating. All versions of the framework tend to lead away from cross-sectional neutrality results. The analysis suggests that one may be able to derive a solution for a parthenogenetic model and then interpret it as consistent with Nash equilibrium behavior in a world with marriage.