We study the incentive to invest to improve marriage prospects, in a frictionless
marriage market with non-transferable utility. Stochastic returns to investment
eliminate the multiplicity of equilibria in models with deterministic returns,
and a unique equilibrium exists under reasonable conditions. Equilibrium investment
is efficient when the sexes are symmetric. However, when there is any asymmetry,
including an unbalanced sex ratio, investments are generically excessive.
For example, if there is an excess of boys, then there is parental over-investment
in boys and under-investment in girls, and total investment will be excessive.
|Name||ESE Discussion Papers|
- ex ante investments
- gender differences
- assortative matching tournament
- sex ratio