This document provides an abstract for a paper analyzing marriage decisions through the lens of behavioral economics. It discusses how marriage involves both costs and benefits at an individual level and has broader economic impacts. Traditionally, expected utility theory has been used to model marriage decisions, but behavioral economics concepts can provide a more realistic understanding by accounting for things like limited information, uncertainty about compatibility and the future, and non-self-interested preferences. The paper will examine costs and benefits of marriage, analyze decisions through traditional and behavioral economic frameworks, and demonstrate how behavioral models can foster improved marital outcomes.

1. Logan
Burnett
Professor
Sheffrin
Behavioral
Economics
28
November
2015
Behavioral
Economics
in
Analyzing
Marriage
Decisions
&
Creating
Better
Outcomes
ABSTRACT
Marriage
is
an
economic
arrangement
just
as
much
as
it
is
an
intimate
relationship.
There
are
both
financial
costs
and
economic
tradeoffs
that
individuals
experience
in
their
decision
to
marry.
There
are
also
economic
benefits
that
incentivize
an
individual’s
pursuit
of
such
a
commitment.
Individual
decisions
to
marry
also
have
significant
external
economic
effects
on
population
growth,
consumption
of
scarce
resources,
distributive
allocations
of
goods
and
services,
labor-­‐force
participation
of
women,
and
litigation
costs.
Marriage
is
most
commonly
defined
as
“the
legally
recognized
union
between
two
individuals.”
Individuals
make
the
decision
to
engage
in
a
marital
relationship
for
a
variety
of
reasons,
including
psychological
commitment,
division
of
household
labor,
and
for
creating
stable
environments
for
raising
children.
However,
it
would
only
make
sense
for
two
individuals
to
marry
one
another
if
they
each
expect
to
be
better
off
from
the
arrangement.
In
standard
economic
terms,
a
marriage
will
occur
only
under
the
condition
that
there
is
an
expected
or
experienced
gain
in
utility
for
each
individual.
This
analysis
will
focus
on
the
most
common
type
of
marital
arrangement,
one
between
male
and
female.
Beyond
the
nature
of
marriage
having
economic
implications,
economic
frameworks
can
demonstrate
how
individuals
choose
their
life
partners,
how
they
manage
their
relationships,
and
provide
insight
into
why
many
marriages
paradoxically
diminish
subjective
well-­‐being,
and
thus
commonly
end
in
divorce.
Each
individual
in
a
marital
arrangement
has
a
set
of
characteristics,
as
well
as
a
set
of
preferences
for
the
characteristics
of
a
potential
partner.
These
individual
traits,
and
the
desire
for
specific
qualities
vary
across
individuals,
and
may
include
factors
like
attractiveness,
intelligence,
education,
income,
demographic
properties,
and
personality
characteristics.
This
analysis
will
start
off
by
examining
the
costs
and
benefits
of
marrying
at
the
individual
level.
Next,
this
paper
will
analyze
the
marriage
decisions
through
traditional
economic
theories
of
choice.
Then,
concepts
from
behavioral
economics
will
be
applied
to
refine
and
expand
models
of
choice
in
order
to
provide
a
more
realistic
understanding
of
how
individuals
evaluate
marital
decisions;
and
will
offer
explanations
to
common
outcomes
surrounding
marriage.
This
analysis
will
also
demonstrate
the
normative
value
of
using
behavioral
economic
applications
and
models
for
fostering
improved
marital
outcomes
at
the
individual
and
institutional
level.
THE
MARKET
FOR
MARRIAGE
AND
THE
DECISION
TO
MARRY
UNDER
EUT
In
the
same
way
that
all
standard
economic
decisions
can
be
thought
of
and
rationalized
in
terms
of
opportunity
costs,
the
decision
to
engage
in
a
marriage
involves
an
individual
foregoing
the
benefits
of
being
single.
In
his
early
economic
analysis
of
the
family
Gary

2. Becker
surmised
that
the
utility
received
from
either
being
single
or
married
could
be
described
in
terms
of
benefits
and
costs
that
involve
payoffs
to
the
individual
(2).
The
positive
payoffs
from
being
single
can
either
result
from
relatively
more
personal
living
space,
greater
independence,
and
more
leisure
time.
The
benefits
arising
from
marriage
include
commitment
and
amorousness,
joint
production
capabilities
such
as
conceiving
child,
and
economies
of
scale
in
producing
household
commodities.
(2).
Furthermore,
the
decision
to
marry
is
complex
and
involves
a
great
deal
of
uncertainty
related
to
long-­‐term
compatibility,
financial
stability,
and
exogenous
events
that
can
change
the
nature
of
a
relationship.
The
uncertainty
is
enhanced
by
the
fact
that
individuals
must
base
their
decision
on
current,
and
usually
limited
information
about
one
another,
as
well
as
expectations
about
the
future
related
to
income,
and
limitations
on
self-­‐indulgence,
etc.
Thus,
standard
economic
framework
has
been
applied
for
modeling
marital
decisions,
although
there
are
many
shortcomings.
The
most
widely
used
model
of
decision-­‐making
under
risk
or
uncertainty
is
derived
from
the
Expected
Utility
Theory.
Neo-­‐Classical
Economics
ascertains
that
this
model
can
accurately
describe
economic
behavior,
and
so
it
can
also
serve
to
be
the
normative
model
of
rational
choice.
There
are
two
main
assumptions
underlying
Expected
Utility
Theory:
First,
individuals
are
motivated
by
utility
maximization;
and
second,
economic
actor’s
utility
maximization
desires
are
administered
purely
by
self-­‐interest.
Additional
considerations
involve
the
assumption
that
individuals
have
well-­‐defined,
rank
ordered
preferences,
and
these
individuals
have
perfect
information
regarding
their
choices
and
of
the
relevant
alternatives.
The
problem
with
this
model
of
rational
choice
is
that
economic
agents
are
humans,
and
humans
have
cognitive
limitations.
In
other
words,
individuals
have
a
finite
capacity
for
understanding
information
and
subsequently
choosing
among
alternatives.
In
the
real
word,
economic
agents
will
attempt
to
reduce
uncertainty
by
seeking
out
information.
They
will
do
this
until
the
marginal
search
costs
exceed
the
marginal
benefits
of
additional
information,
not
until
they
perfectly
understand
all
relevant
information.
As
a
result,
economic
agents
will
use
heuristics
to
simplify
their
decisions
in
the
face
of
complexity
and
uncertainty.
Use
of
such
simplifying
mechanisms
leads
to
systematic
and
predictable
biases,
which
in
turn
often
produces
suboptimal
outcomes
(4).
The
“representativeness
heuristic”
is
relevant
in
marital
choice
theory
in
that
prospective
couples
view
their
relationship
as
unique,
and
thus
do
not
believe
that
their
relationship
is
representative
of
the
average
couple.
The
result
is
that
the
couple
is
insensitive
to
the
fairly
high
probability
that
their
marriage
will
result
in
divorce.
Individuals
are
also
subject
to
basing
their
decisions
on
the
ease
by
which
they
can
access
information
about
outcomes
and
probabilities.
This
phenomenon
is
known
as
the
“availability
heuristic”,
and
its
use
can
also
lead
to
systematic
errors
in
probability
evaluation.
Thus,
individuals
may
base
their
decision
to
marry
on
inaccurate
assessments
of
probabilities.
EMPIRACALLY
PROVEN
FAILURES
IN
THE
MARKET
FOR
MARRIAGE
A
market
is
an
economic
structure
whereby
economic
actors
seek
to
maximize
their
individual
outcomes
through
trading
scarce
resources.
Markets,
if
they
are
efficient
will
achieve
the
optimal
allocation
of
resources,
which
in
turn
leads
to
the
maximization
of
individual
satisfaction,
societal
enrichment,
and
economic
growth.
No
real-­‐world
market
is
perfectly
efficient
due
to
the
presence
of
simplifying
assumptions,
which
cannot

3. wholesomely
quantify
the
complexities
of
the
world.
Thus,
all
markets
fail
in
one
way
or
another.
Even
marital
decisions
can
be
analyzed
by
applying
market
principles.
The
‘marriage
market’
however,
fails
in
number
of
ways,
which
can
help
to
explain
why
so
many
individuals
make
sub-­‐optimal
marital
decisions.
First
of
all,
open
market
access
is
not
possible,
and
the
result
is
that
the
market
for
marriage
is
extremely
segmented
(1).
This
is
because
it
is
impossible
for
a
given
individual
to
access
to
everybody
in
the
world,
and
equally
as
impossible
for
an
individual
to
have
perfect
information
about
every
market
participant.
There
are
also
particularly
high
search
costs
in
the
marriage
market.
Furthermore,
the
marginal
benefits
of
information
are
low
due
to
the
overwhelming
presence
of
asymmetric
information,
and
the
costs
of
attaining
the
information
are
high
in
the
first
place
(1).
Because
information
gathered
about
a
potential
partner
at
the
evaluation
stage
is
of
limited
value,
individuals
do
not
devotedly
search
for
the
partner
that
perfectly
matches
their
preferences,
and
thus
conform
to
the
model
of
bounded
rationality.
(1).
In
the
same
way,
because
actors
in
the
marriage
market
have
cognitive
limitations,
they
will
satisfice
in
order
to
simplify
their
decision.
Also,
over
the
course
of
one’s
life,
individuals
might
change
their
preferences
in
respect
to
the
characteristics
they
desire
their
spouse
to
have,
or
about
the
type
of
relationship
they
wish
to
be
in.
The
choice
mechanisms
individuals
use
to
find
a
partner
demonstrate
how
individual
actors
search
for
a
partner,
and
offers
explanations
for
the
wide
presence
of
suboptimal
marital
outcomes
in
the
real
world.
USING
PROSPECT
THEORY
FOR
EVALUATING
MARITAL
DECISIONS
It
is
critical
that
when
considering
marriage,
individuals
use
the
most
refined
and
practical
decision
mechanism,
as
making
the
wrong
choice
in
this
context
can
be
extremely
costly
financially,
psychologically,
and
temporally.
The
problem
with
using
expected
utility
theory
in
evaluating
whether
to
get
marred
or
not,
lies
in
the
fact
that
individuals
often
do
not
act
in
accordance
with
the
theory
when
faced
with
real
world
decisions.
This
is
because
expected
utility
theory
does
not
consider
how
individuals
frame
decisions
in
true
behavioral
settings.
Because
individuals
are
faced
with
uncertainty
in
decision
making,
and
do
not
have
the
cognitive
capacity
to
perfectly
understand
all
relevant
information,
they
will
often
use
heuristics
and
available
information
to
frame
the
decision
in
such
a
way
that
they
are
best
able
to
consider
the
possible
outcomes,
and
the
value
of
those
outcomes
in
the
choice
decision.
A
decision’s
frame
alone
can
cause
an
individual
to
reverse
his
or
her
preferences
without
actually
changing
the
outcomes
of
the
choices
themselves.
This
empirically
proved
fact,
known
as
the
Allais
Paradox,
does
not
coincide
with
rational
choice
theory;
whereby
individuals
will
maximize
their
utility
irrespective
of
how
a
decision
is
presented
to
them.
Prospect
theory
accounts
for
the
widely
observed
behavioral
tendencies
that
economic
agents
display
in
real
world
decision
settings,
but
that
are
not
included
in
the
traditional
description
of
the
“Economic
Man”.
Prospect
Theory
therefore
might
offer
a
more
realistic
and
applicable
model
of
choice
for
individuals
considering
marriage.
In
the
first
phase
of
Prospect
Theory,
referred
to
as
the
Editing
Phase,
individuals
will
simplify
the
choice
decision
by
identifying
possible
outcomes,
and
establishing
a
reference
point
to
which
they
can
assess
the
value
of
those
possible
outcomes.
Prospect
theory
suggests
that
individuals
evaluate
decisions
in
terms
of
gains
and
losses
relative
to
a
reference
point,
rather
than
in
terms
of
change
in
absolute
levels
of
wealth,
as
would
be
the
case
under
the
standard
model.

4. Prospect
theory’s
value
function
differs
from
the
utility
function
in
that
it
accounts
for
the
fact
that
people
are
loss
averse,
and
consequently
risk-­‐loving
when
they
are
in
a
loss
frame.
In
the
second
phase
of
prospect
theory,
the
individual
will
evaluate
prospects
by
assigning
decision
weights,
based
on
subjectively
assessed
probabilities,
to
the
values
of
possible
outcomes.
These
decision
weights
essentially
measure
the
individuals
forecast
about
the
chance
of
an
event
occurring.
The
weighting
function
reflects
the
tendencies
of
individuals
to
overweight
the
likelihood
of
unlikely
extreme
outcomes.
This
framework
is
carefully
crafted
around
observable
and
empirically
proven
behavioral
tendencies,
and
consequently
adjusts
economic
models
to
reflect
psychological
processes.
Prospect
theory
can
therefore
be
of
useful
in
understanding
how
individuals
assess
potential
partners,
why
individuals
initially
decide
to
enter
a
marriage,
and
how
agents
in
a
marital
relationship
make
decisions
about
whether
to
continue
a
marriage
or
get
a
divorce.
(3).
PROSPECT
THEORY
&
ROLE
OF
LOSS
AVERSION
IN
SELECTING
A
PARTNER
As
mentioned
earlier,
individuals
will
decide
to
get
married
if
they
find
a
partner
whose
unique
characteristics
provide
payoffs
that
would
deliver
them
more
value
than
remaining
single.
Under
prospect
theory,
people
will
assign
values
to
the
characteristics
of
a
potential
partner,
and
therefore
the
expected
benefits
they
hope
to
receive
from
them.
They
will
also
subjectively
assess
the
probability
that
those
qualities
will
result
in
gains
from
the
decision
to
marry.
If
individuals
assess
the
prospect
that
a
marriage
will
deliver
them
greater
value
than
their
current
welfare
state,
they
will
elect
to
engage
in
a
marriage.
Because
in
the
real
world
we
cannot
be
sure
that
an
individual
will
continue
to
exhibit
the
same
behaviors
over
time,
uncertainty
arises
in
the
likelihood
of
those
payoffs
actually
occurring
at
the
expected
value
and
frequency.
However,
the
expectation
of
the
provision
of
those
payoffs
over
the
course
of
the
relationship
serves
as
the
individual’s
reference
point.
If
an
individual’s
prospective
partner
proves
over
time
to
behave
unreliably,
the
individual
will
decide
against
pursuing
the
marriage
because
of
loss
aversion.
In
other
words,
the
prospect
of
uncertainty
in
receiving
the
full
value
of
the
expected
benefits
from
the
potential
marriage,
places
the
individual
in
the
loss
frame.
And
because
individuals
are
loss
averse,
he
or
she
would
choose
to
remain
single.
The
value
function
illustrates
loss
aversion
through
the
convexity
and
relative
steepness
of
the
function
around
the
reference
point
in
the
loss
frame.
ROLE
OF
ENDOWMENT
EFFECTS
&
SUNK
COSTS
IN
MARRIAGE
DECISIONS
The
endowment
effect
presumes
that
when
individuals
attain
possession
of
something,
they
will
attach
a
higher
value
to
that
thing
simply
because
it
belongs
to
them.
In
context
of
marriage,
once
two
individuals
become
husband
and
wife,
they
both
tend
to
overstate
the
value
of
the
relationship
simply
because
the
marriage
is
unique
to
them.
The
endowment
effect
is
irrational
according
to
standard
economic
theory
because
the
inflated
value
assigned
to
the
relationship
is
baseless,
and
will
result
in
sub-­‐optimal
marital
outcomes.
The
presence
of
the
endowment
effect
has
profound
consequences
on
decisions
relating
to
continuing
or
ending
a
marriage.
Even
in
the
case
in
which
both
individuals
are
unhappy
with
their
marriage,
and
are
thus
receiving
negative
payoffs
from
its
persistence,
the
decision
to
continue
a
marriage
is
strongly
influenced
by
endowment
effect,
which
frames

5. the
decision
in
terms
of
loss.
As
a
result,
when
evaluating
this
decision,
individuals
assign
an
overstated
value
to
a
prospective
gamble
that
includes
a
possibility
of
improved
marriage
conditions
in
the
future.
They
will
then
compare
their
assessment
of
the
gamble
to
the
value
of
divorce,
which
is
a
certain
outcome
with
definite
payoffs.
But,
because
individuals
are
loss
averse
by
nature
and
value
endowment,
they
will
assign
an
inflated
relative
value
to
the
prospect
of
continuing
the
marriage
in
hopes
of
better
outcomes
in
the
future.
In
the
same
way,
individuals
facing
this
decision
further
constrain
themselves
to
suboptimal
outcomes
by
assigning
values
to
sunk
costs.
Sunk
costs
are
commonly
defined
in
economics
as
costs
that
have
already
been
incurred,
and
which
cannot
be
recovered.
The
fact
that
these
costs
have
no
salvage
value
means
that
individuals
should
not
consider
them
when
facing
present
decisions.
Rational
individuals
facing
a
decision
will
use
marginal
analysis
to
weigh
their
decision.
However,
empirical
evidence
reveals
the
tendency
of
economic
agents
to
factor
sunk
costs
into
their
decision
mechanisms.
In
relation
to
the
topic
of
marriage,
individuals
will
consider
their
historical
investment
of
time
and
energy
in
making
subsequent
marital
decisions,
even
though
these
are
sunk
costs
and
should
not
influence
present
decisions
(1).
The
behavioral
implications
of
the
endowment
and
sunk
cost
effects
are
that
individuals
will
be
more
likely
continue
a
marriage
even
if
it
brings
them
some
level
of
disutility,
which
will
predict
the
presence
of
more
unhappy
couples
and
high
psychological
costs
for
individuals
subject
to
these
conditions.
EFFECTS
OF
TIME-­‐INCONSISTENT
PREFERENCES
ON
MARRIAGE
STABILITY
Even
if
the
expected
payoffs
received
from
the
other
individual
in
the
marital
arrangement
are
certain,
an
individual’s
valuation
of
these
payoffs
may
change
in
unpredictable
ways,
and
so
the
payoffs
may
be
valued
either
more
or
less
in
different
time
periods.
This
is
because
individuals
have
time-­‐
inconsistent
preferences,
meaning
people’s
tastes
and
economic
attitudes
change
as
time
elapses
in
complex
ways
that
are
difficult
to
model.
Individuals
will
take
on
different
consumption
and
saving
patterns,
attitudes
towards
risk,
preferences
for
certain
qualities,
and
will
receive
utility
from
different
things
at
different
points
in
time.
Standard
economic
theory
examines
how
individuals
evaluate
intertemporal
choices,
or
decisions
that
involve
the
individual
trading
off
benefits
and
costs
in
different
time
periods,
using
the
Discounted
Utility
Model.
The
model
assumes
that
people
evaluate
intertemporal
choices
by
exponentially
discounting
future
“pleasures”
and
“pains”
resulting
from
the
present
choice.
Economic
agents
discount
in
order
to
better
appraise
future
outcomes
by
quantifying
them
in
present
terms.
The
use
of
exponential
discounting
in
evaluating
how
a
present
decision
that
involves
trading
off
benefits
and
costs
in
the
future,
would
be
a
good
predictor
of
economic
decision
if
individuals
had
the
propensity
to
make
dynamically
consistent
choices,
as
suggested
by
rational
choice
theory.
We
know
from
empirical
economic
analysis
and
behavioral
studies
that
this
theory
cannot
accurately
predict
individual
behavior.
Marriage
is
one
of
the
highest
stake
intertemporal
choices
that
most
individuals
will
have
to
make
in
their
life,
because
in
theory,
it
involves
a
lifetime
commitment
to
another
individual,
involves
sacrificing
independence,
usually
implies
raising
a
child,
and
ultimately
results
in
trading-­‐off
self-­‐interest.
Thus,
an
individual
facing
a
present
decision
to
get
married
faces
a
great
deal
of
uncertainty;
and
while
there
are
future
benefits
too,
those
are
uncertain
as
well.
Human
behavior
is
complex
and
can
oftentimes
be
unpredictable,
so
reducing
the
human
decision
making
process
to
a
simple
exponential
time

6. discounting
factor
tells
us
little,
if
anything
at
all,
about
how
individuals
think
about
intertemporal
choices.
Time-­‐inconsistent
models
of
intertemporal
choice
theory
have
been
developed
to
more
accurately
reflect
human
rationale
and
time
preferences.
Such
models
show
that
individuals
have
a
strongly
biased
preference
for
present
consumption,
and
that
they
more
closely
use
hyperbolic
discounting
to
make
choices
involving
future
outcomes.
Hyperbolic
discounting
implies
that
individuals
have
a
strong
time
preference
for
the
present,
and
that
subsequent
near
future
periods
are
much
more
heavily
discounted
than
periods
further
in
the
future.
This
means
that
if
individuals
make
that
choices
that
involve
delayed
outcomes,
valuations
of
those
outcomes
will
decrease
more
rapidly
in
periods
closer
to
the
choice,
and
the
rate
of
decrease
will
diminish
as
time
moves
further
out.
Time-­‐
inconsistent
models
suggest
that
we
do
not
have
the
cognitive
resources
to
understand
what
our
preferences
will
be
as
we
look
further
out
into
the
future.
These
models
are
consistent
with,
and
help
explain
the
presence
preference
reversals
that
commonly
occur
when
we
make
intertemporal
choices.
In
terms
of
marriage,
time-­‐inconsistent
models
provide
descriptive
insight
into
how
present-­‐bias
might
lead
individuals
to
impulsively
engage
into
a
marital
arrangement,
and
explain
how
and
why
the
value
of
a
marriage
to
an
individual
might
change
over
time.
Time-­‐inconsistent
models
may
additionally
have
normative
implications:
if
individuals
can
better
understand
how
they
make
choices,
and
better
understand
the
uncertainties
they
face,
they
might
be
subject
to
less
error
in
their
judgments.
In
the
case
of
marriage,
understanding
intertemporal
choice
might
influence
individuals
take
more
of
a
long-­‐term
view
in
assessing
the
decision
to
get
married.
Married
couples
might
even
elect
to
implement
self-­‐control
and
commitment
devices
to
mitigate
future
preference
reversals
in
order
to
maintain
a
healthier
longer-­‐term
relationship.
USING
GAME
THEORY
TO
SUSTAIN
COMPATIBILITY
IN
MARRIAGE
If
the
marriage
market
operated
perfectly,
the
optimal
sorting
of
individuals
in
the
market
would
take
place.
As
mentioned
earlier,
the
underlying
assumptions
for
a
truly
efficient
market
presumes
that
individuals
have
time-­‐consistent
rank
ordered
preferences,
and
optimize
their
outcomes
through
the
use
of
perfect
information.
Optimal
sorting
would
mean
that
individuals
would
select
partners
whose
characteristics
exactly
meet
their
pre-­‐
defined
preferences.
If
this
occurred,
marriage
outcomes
would
be
maximized
and
individuals
would
be
perfectly
compatible.
Under
the
assumption
that
individuals
in
a
marriage
would
be
perfectly
compatible,
one
could
further
infer
that
this
means
that
they
would
not
substitute
out
any
of
their
partner’s
characteristics,
given
the
opportunity.
Further,
if
that
assumption
held,
it
is
likely
that
married
couples
would
have
no
propensity
to
ever
disagree.
However,
we
know
that
this
is
certainly
not
the
case
in
the
real
world.
The
cognitive
limitations,
simplifying
heuristics,
systematic
biases,
and
models
of
observable
human
decision
mechanisms
discussed
earlier
reveal
the
inability
of
individuals
to
optimize,
especially
in
intertemporal
choice
decisions
such
as
marriage.
Therefore,
when
individuals
enter
into
a
marital
arrangement,
they
must
strive
to
achieve
compatibility.
This
however,
is
difficult
given
that
married
individuals
almost
inevitably
have
different
ways
of
viewing
the
world,
and
thus
making
decisions.
It
is
difficult
enough
for
an
individual
achieve
desirable
outcomes
when
facing
complex
choices,
and
thus
even
more
complicated
when
two
individuals
attempt
to
optimize
their
joint
outcomes.
Behavioral
Game
Theory
examines
how
two
or
more
individuals
will
each
attempt
to
achieve
the
best
outcomes,
but
are
subject

7. to
the
interdependency
of
one
another’s
choices.
Married
couples
face
game-­‐theory
dilemmas
every
single
day;
the
success
they
have
in
cooperating
with
one
another
will
determine
the
outcome
of
their
marriage.
The
“Battle
of
the
sexes”
game
demonstrates
decision
situations
married
couples
face
regularly.
The
game
considers
a
married
couple
that
hopes
to
spend
a
Friday
night
together,
and
will
receive
utility
from
doing
so,
and
no
utility
if
they
do
not.
The
dilemma
arises
from
the
fact
that
the
husband
wishes
to
go
see
a
boxing
match,
whereas
the
wife
wishes
to
go
see
a
ballet.
The
husband
gets
a
higher
payoff
from
going
to
the
boxing
match,
and
the
wife
receives
the
same
payoff
if
she
attends
the
ballet;
and
in
the
event
that
one
of
them
cooperates,
only
one
of
them
will
actually
receive
utility
from
the
entertainment
source,
and
the
other
will
only
receive
utility
from
spending
time
together.
The
natural
solution
is
that
the
couple
will
spend
their
Friday
night
apart,
and
will
both
end
up
receiving
no
utility.
The
best
possible
outcome
would
involve
either
the
husband
cooperating
with
the
wife
by
going
to
the
ballet,
or
conversely,
the
wife
cooperating
with
the
husband
by
going
to
the
boxing
match.
Subsequently,
the
couple
should
impose
a
commitment
mechanism
to
ensure
that
next
time
a
similar
dilemma
arises;
the
roles
are
reversed
so
as
to
normalize
payoffs
over
the
course
of
the
relationship.
If
married
couples
can
understand
the
intuition
behind
how
they
make
interdependent
decisions,
they
will
comprehend
that
even
though
oftentimes
the
“non-­‐cooperative”
strategy
appears
more
attractive,
choosing
“cooperative”
strategies
will
result
in
greater
payoffs,
and
thus
a
more
compatible
marriage
in
the
long
run.
References:
1. Marriage Paradoxes, Bruno S. Frey & Reiner Eichenberger, Rationality and Society May
1996 8: 187-206.
2. A Theory of Marriage, Gary S. Becker. Economics of the Family: Marriage, Children, and
Human Capital, 1974
3. Prospect Theory and Marriage Decisions, Anastasia Bogdanova. Department of Economics,
Duke University, 2012
4. Judgment under Uncertainty: Heuristics and Biases, Amos Tversky; Daniel Kahneman.
Science, New Series, Vol. 185, No. 4157. (Sep. 27, 1974), pp. 1124-1131.
5. Prospect Theory: An Analysis of Decision under Risk, Daniel Kahneman and Amos Tversky.
Econometrica, 47(2), pp. 263-291, March 1979