Title: Gratitude, Bargaining within Marriage, and Intergenerational Interactions

Speaker: Weiguang Deng, Assistant Professor, Hunan University

Time: December 15th, 2017 14:30-16:00

Venue: Conference Room 106B, Zhonghui Building

Abstract:

We reveal why mental accounts, specifically the “gratitude”, matters for bargaining and thus the resource allocation within a union, for instance, an extended family. We model how individuals with altruistic partiality influence the welfare distribution within a union by manipulating members’ gratitude. We argue that one individual (parent-in-law) would offer support to his/her parent-in-law (child-in-law) only when such support induces gratitude in one’s spouse (child-in-law) and, hence, increases the bargaining power of oneself (one’s own child) within marriage. Consistent empirical evidence verifies the model predictions. We find that individuals with increased bargaining power (mainly measured by relative income) give (receive) more (fewer) transfers to (from) both parents and parents-in-law and communicate more (less) often with their own parents (parents-in-law).