The Good Wife? Reputation Dynamics and Financial Decision-Making inside the Household
Nina Buchmann, Pascaline Dupas, Roberta Ziparo
American Economic Review · 2025 · Volume 115 · Issue 2
Abstract
We study reputation dynamics within the household in a setting where women regularly receive transfers from their husbands for household purchases. We propose a signaling model in which wives try to maintain a good reputation in the eyes of their husbands to receive high transfers. This leads them to (i) avoid risky purchases (goods with unknown returns) and (ii) knowingly overuse low-return goods to hide bad purchase decisions—we call this the intrahousehold sunk cost effect. We present supportive evidence for the model from a series of experiments with married couples in rural Malawi.
Keywords
Household Production and Intrahousehold Allocation, Asymmetric and Private Information, Mechanism Design, Marriage, Marital Dissolution, Family Structure, Domestic Abuse, Economics of Gender, Non-labor Discrimination, Microeconomic Analyses of Economic Development, Economic Development: Urban, Rural, Regional, and Transportation Analysis, Housing, Infrastructure
Enable JavaScript for citation tools and additional paper interactions.