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Comments on: Marriage, investment, and sunk costs http://www.tvhe.co.nz/2013/10/15/marriage-investment-and-sunk-costs/ The Visible Hand in Economics Thu, 06 Apr 2023 05:01:02 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: sanjay sharma http://www.tvhe.co.nz/2013/10/15/marriage-investment-and-sunk-costs/#comment-42388 Mon, 28 Oct 2013 07:10:00 +0000 http://www.tvhe.co.nz/?p=10181#comment-42388 Greatepoint is noted. Need to understand basic things in life. Every person need to partner for life. So Anybaddy taking care of it. But some peoples are point of view is very different. So they faces many problems

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By: jamesz http://www.tvhe.co.nz/2013/10/15/marriage-investment-and-sunk-costs/#comment-42330 Tue, 15 Oct 2013 08:28:00 +0000 http://www.tvhe.co.nz/?p=10181#comment-42330 In reply to Seamus Hogan.

There was a good article about this phenomenon on dating websites: people struggle to commit because it’s too easy to find new matches. Five minutes of googling has failed to turn it up, sadly.

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By: Seamus Hogan http://www.tvhe.co.nz/2013/10/15/marriage-investment-and-sunk-costs/#comment-42329 Tue, 15 Oct 2013 01:09:00 +0000 http://www.tvhe.co.nz/?p=10181#comment-42329 A few years ago I proposed an Honours microtheory research paper along these lines. The motivation was a TV news item on speed dating, about a woman who had managed to start many relationships as a result of speed-dating encounters, but none lasted. My hypothesis was than in a model with the possibility of relationship-specific investment, a new technology that increased the speed of finding new matches, would lower the cost of ending a current match, and so remove the incentive to invest in relationship-specific capital, thus reducing the average quality of matches to everyone’s detriment. Sadly, no student took up that project. I will have to try again next year.

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By: Rebecca Stevenson http://www.tvhe.co.nz/2013/10/15/marriage-investment-and-sunk-costs/#comment-42328 Tue, 15 Oct 2013 00:50:00 +0000 http://www.tvhe.co.nz/?p=10181#comment-42328 or adopt a “do the time” inert approach under the Relationship Property Act and get the financial benefits of marriage without the associated costs of a wedding

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By: Eric Crampton http://www.tvhe.co.nz/2013/10/15/marriage-investment-and-sunk-costs/#comment-42327 Tue, 15 Oct 2013 00:18:00 +0000 http://www.tvhe.co.nz/?p=10181#comment-42327 In reply to Matt Nolan.

Adshade’s proposed marriage vows:

“I, [name of groom], agree to enter into a contract with you, [name of bride], that will govern the terms of our marriage. I accept that while I have met other women whose qualities were such that they surpassed my minimum requirements for a bride, the fact that they found me lacking has led me to choose you, my love, as my wife. What you lack in terms of education and
income, you more than compensate for with your youthfulness and attractive appearance, and I vow that this trade-off is sufficient for me to choose you as my bride. I promise to be faithful, even though the low cost of searching and your inevitable declining value might one day encourage me to seek a new wife.

I vow to work with you toward the common goal of exploiting the division of
labour in the production of household goods so that our household will prosper.

I will continue to invest in my human capital to ensure that your future
expectations of our household income are met. While it may not be rational, I pledge to invest in our children and my asset portfolio as if I expected us to be together until death do we part.”

“I, [name of bride], agree to enter into a contract with you, [name of groom], that will govern the terms of our marriage. I accept that while I have met other men whose qualities were such that they surpassed my
minimum requirements for a groom, the fact that they found me lacking has led me to choose you, my love, as my husband. What you lack in stature and attractiveness, you more than compensate for with your level of education and occupational choice, and I vow that this trade-off is sufficient for me to choose you as my husband.

I promise that any children born into our marriage will be biologically your own, even as I know that I will be tempted to seek short-term relationships with men who possess a better genetic endowment. I will sacrifice my own human capital for that of our children, in the knowledge that you will bring in sufficient resources for our family to ensure our well-being.

While it may not be rational, I will quell my inclination to behave in a risk-averse manner and pledge to invest in our marriage and my asset
portfolio as if I expected us to be together until death do we part.”

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By: Matt Nolan http://www.tvhe.co.nz/2013/10/15/marriage-investment-and-sunk-costs/#comment-42324 Mon, 14 Oct 2013 22:53:00 +0000 http://www.tvhe.co.nz/?p=10181#comment-42324 In reply to Eric Crampton.

I’ll have to give that a go at some point – never heard of it!

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By: Matt Nolan http://www.tvhe.co.nz/2013/10/15/marriage-investment-and-sunk-costs/#comment-42323 Mon, 14 Oct 2013 22:52:00 +0000 http://www.tvhe.co.nz/?p=10181#comment-42323 In reply to Shamubeel Eaqub.

I mean’t to note at the end of this post:

“I have ignored the signalling and consumption explanations for marriage. That is just my bias, I’m a sucker for a beautiful story of overcoming insufficient relationship specific investment”

But then the website crashed …

I also meant to mention sunk costs at some point, but the website crashed before I was finished but after I had told it to auto-post. This may teach me to actually hold off setting up the auto-post until the post itself is finished …

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By: Eric Crampton http://www.tvhe.co.nz/2013/10/15/marriage-investment-and-sunk-costs/#comment-42322 Mon, 14 Oct 2013 22:49:00 +0000 http://www.tvhe.co.nz/?p=10181#comment-42322 Read Adshade’s Dollars & Sex. Great stuff.

I spend a week in my “Current policy issues” class on Sex, Love and Economics….

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By: Shamubeel Eaqub http://www.tvhe.co.nz/2013/10/15/marriage-investment-and-sunk-costs/#comment-42321 Mon, 14 Oct 2013 22:45:00 +0000 http://www.tvhe.co.nz/?p=10181#comment-42321 You know, I didnt do this when I popped the question to my now-wife. It was very much a social/cultural device to declare commitment to the relationship.

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