the importance of financial considerations in divorce decisions i introduction one of the most dramatic and commonly cited consequences of divorce is the fall in family money income especially for households headed by divorced women using the panel survey of income dynamics duncan and hoffman 1985 estimate that the family income of divorced and separated women fell by 19 percent during the year following divorce or separation a study by nestel et al 1983 using data from the mature women s cohort of the national longitudinal survey of labor market experience indicates that the poverty rate for households headed by women who were divorced during the survey and did not remarry rose from 10 percent just prior to divorce to 25 percent immediately after dovorce similar results are reported by mott and moore 1982 and espenshade 1979 these statistics however may overestimate the long term negative consequences of divorce because they ignore the possibility of an improvement in financial circumstances through remarriage 1 mott and moore 1982 find that even for women who do not remarry economic status improves over time due primarily to better employment prospects given the large financial costs of divorce especially in the short run it is reasonable to ask how important are financial considerations in divorce decisions this paper explores the linkages between the financial consequences of divorce and the decision to become divorced the paper extends previous work by measuring these consequences over a period of time rather than at one point in time in particular the paper addresses two issues 1 do the expected financial consequences of divorce affect the decision to become divorced and 2 what is the relative importance of short versus long run considerations a standard choice theoretic model predicts that the smaller are the financial costs of divorce the greater is the probability of divorce the financial opportunity cost of divorce is measured as the difference in the expected present values of the income streams within marriage and at divorce the expected income stream at divorce includes the financial value attached to a possible remarriage as well as income from employment welfare alimony and child support payments the empirical analysis utilizes data from the national longitudinal survey of work experience of young women nls a sample of those divorced between 1973 and 1978 is observed over time during marriage after divorce and for some during a remarriage thus the actual income changes resulting from divorce and remarriage are measured income changes for a sample of continuously married women are also measured over a comparable period the expected changes in income for each subsample are estimated as a function of socio economic variables and the values are imputed for the entire sample to explore the relationship between these expected income streams and decisions about divorce the result indicate that the expected short term financial consequences of divorce are a better predictor of subsequent divorce than are the longer term consequences this evidence implies that individuals behave as if they face high discount rates ii economic models of divorce one of the first economic models of divorce was developed and emphirically tested by becker landes and michael 1977 as in any choice theoretic model divorce occurs when the gains from that choice exceed the benefit from remaining married gains from marriage include both a pecuniary component such as pooled household income from the market work of the husband and wife and a non pecuniary component such as children love companionship and household goods from home production gains from divorce include own labor market income home production which may differ between the divorced and married states and the expected value of potential new relationship e g remarriage marriage specific capital such as children has a higher value within marriage and increases the opportunity cost of divorce

evaluating the impacts of priority dispatch in the european electricity market this paper compares the impact of the nodal pricing and european market coupling organizations on different economic agents of the power system under two main wind policies under the priority dispatch policy transmission system operators tsos must accommodate all wind energy produced which thus has the priority over energy produced by conventional plants in the no priority dispatch policy tsos can decide not to inject all potential wind power in the grid in order to limit congestion problems the effects of these two wind policies are measured by developing simple stochastic programming models that consider cases with different wind penetration levels existing capacities and endogenous investments as well as assumptions on the eu ets our computational experiments show that when there is priority dispatch nodal pricing and market coupling evolve in a similar way as long as wind penetration is not too high in contrast a significant increase of wind penetration causes the collapse of the market coupling organization while nodal pricing continues to perform well on the other hand no priority dispatch removes most of the problems resulting from market coupling which still exhibits a slightly lower efficiency than nodal pricing these outcomes do not depend on the contextual assumptions fixed capacities vs investment eu ets vs non eu ets that characterize the several cases analyzed this suggested that our policy conclusions are robust furthermore our models overestimate the flexibility of conventional plants which means that these conclusions would likely be reinforced with a more detailed model

children as collective goods and divorce settlements the failure of many divorced fathers to comply with court mandated child support awards has been identified as a major reason why a growing number of children live in poverty in female headed households this paper presents a model that seeks to explain why so many divorced fathers allow their children s welfare to suffer as a consequence of divorce the point of departure is the recognition that children are collective consumption goods from the point of view of the father and mother within marriage proximity and altruism serve to overcome the free rider problem associated with the provision of public goods however on divorce the noncustodial parent suffers a loss of control over the allocative decisions of the custodial parent and it is not feasible for the couple to achieve a pareto optimal allocation of their joint resources a model of optimal marriage contracts is constructed in which a couple decides on the allocation of resources within marriage and on the terms of a settlement in the event

control rights in complex partnerships this paper develops a theory of the allocation of authority between two players who are in a complex partnership that is a partnership which produces impure public goods we show that the optimal allocation depends on technological factors the parties valuations of the goods produced and the degree of impurity of these goods when the degree of impurity is large control rights should be given to the main investor irrespective of preference considerations there are some situations in which this allocation is optimal even if the degree of impurity is very low as long as one party s investment is more important than the other party s if the parties investments are of similar importance and the degree of impurity is large shared authority is optimal with a greater share going to the low valuation party if the importance of the parties investments is similar but the degree of impurity is neither large nor small the low valuation party should receive sole authority we analyze an extension in which side payments are infeasible we check for robustness of our results in several dimensions such as allowing for multiple parties or for joint authority and apply our results to interpret a number of complex partnerships including those involving schools and child custody jel d02 o23 h41 l31

rational household labor supply traditionally household behavior is derived from the maximization of a unique utility function in this paper we propose an alternative approach in which the household is modeled as a two member collectivity taking pareto efficient decisions the consequences of this assumption are analyzed in a three good model in which only total consumption and each member s labor supply are observable if the agents are assumed egoistic i e they are only concerned with their own leisure and consumption it is possible to derive falsifiable conditions upon household labor supplies from both a parametric and nonparametric viewpoint if alternatively agents are altruistic restrictions obtain in the nonparametric context useful interpretation stems from the comparison with the characterization of aggregate demand for a private good economy

the economics of franchise contracts as an organizational arrangement the franchise contract lies between anonymous price mediated exchange and centralized intrafirm employment in contrast to conventional market exchange franchise contracts typically impose on franchisees retail quality standards common hours of business price controls and nonlinear payment schedules for example fixed initial royalty fees plus a percentage of gross retail revenues while franchisors typically provide national advertising and training programs monitor and inspect the franchisees performance with varying intensity across industries and hold the residual power to terminate the franchise agreement observations of actual terminations indicate that franchisors sometimes exclude this power franchisors sometimes face persistent queues of potential franchisees in contrast to simple employment contracts franchise agreements provide for sharing of profits through royalties on revenue or output and considerable freedom for independent decisions by local franchisees 1 why do these franchise contracts exist

economic dispatch savings in the coal fired power sector an empirical study of china abstract the current equal share dispatch approach has often been criticized for its negative influence on the electricity system operation in china which worsens the energy security environmental sustainability and affordability problems to provide references for the on going electricity market reform this study employs an optimization model to quantify the economic dispatch savings in the coal fired power sector key findings are summarized as follows 1 the heat rates of 2803 coal generators in china range from 273 91 gce kwh to 348 38 gce kwh units in 2014 and the great differences among these generators at different geographical areas exhibit the necessity for economic dispatch 2 5 67 of the coal used for power generation could be saved from economic dispatch in a provincial level the monetary value of which can reduce the average electricity price by 0 0058 yuan kwh in 2014 3 three major political and economic challenges hinder the transition from the current dispatch mode to economic dispatch namely the insufficient running hours for cost recovery limited cross border trading due to electricity over supply and local protectionism and the political economy problems from generators of different ownership types

the effect of child support policies on visitations and transfers recent research on child support issues has been concerned with normative problems involvingthe distribution of welfare between divorced parents and their children as well as with the assess ment of the behavioral responses of parents to child support orders and custody arrangements see e g del boca and flinn 1995 gar nkel and klawitter 1990 bartfeldt and gar nkel 1996 del boca 1996 del boca and ribero 1998 and flinn 2000 while there is bynow an extensive literature analyzing the e ects of child support policies on monetary transfersof noncustodial parents and the extent of compliance with child support orders little researchhas been done on the relationship between monetary transfers between parents and the divisionof the child s time while income transfers to the custodial parent are no doubt importantfor the child s consumption and general well being there exists considerable empirical evidencesuggesting that the division of the child s time between the parents has important e ects on thechild s welfare beller and graham 1993 there have been few analyses of this relationship weiss and willis 1985 provide one theoretical motivation for the positive relationship betweenthe noncustodial parent s contact time with the child and their level of transfers they claimthat increased contact time allows better monitoring of the custodial parent s expenditures onthe child which induces higher levels of transfers to the custodial parent we have developed a model del boca and ribero 1999 in which visitations and childsupport are the outcomes of a negotiation process whereby the father exchanges income forvisitation time institutional agents such as judges state legislatures etc can impact thewelfareofthemembersofthenonintactfamilybyalteringtheendowmentsofeachofthe1

budgetary units a weberian approach to consumption1 established consumption theory relies heavily on application of individualistic frames and market models of behavior a framework built around consumption oriented groups would facilitate progress toward a more general theory of consumption this article reintroduces and extends weber s budgetary unit concept to address this gap correcting key problems dogging the consumption literature the budgetary unit concept 1 offers a new framework for theorizing and better accounting for observed consumption patterns 2 reveals how consumption units have organizational logics preferences strengths and vulnerabilities that are consequentially distinct from market logic of production and profit and 3 focuses attention on social processes and features enabling theorization of general social patterns of consumption across diverse contexts this article highlights the explanatory power and broad applicability of weber s budgetary unit approach using the conventionally dissimilar cases of russian organized

rationalizing child support decisions the authors provide a framework within which the child support compliance decisions of noncustodial fathers and the child support awards set by institutional agents can be coherently interpreted the model of child support transfers is able to capture qualitatively the features of the monthly payment distribution estimated parental decision rules are used to infer the implicit weights given by institutional agents to the postdivorce welfare of parents and children the authors find that the weight attached to the combined welfare of the custodial mother and child is significantly less than the weight given to the father s welfare in most sample cases copyright 1995 by american economic association

renewable energy integration in zonal markets in this paper we investigate the impact of zonal network management in the operation of power systems with significant levels of renewable energy integration our study is inspired by the current state of the european energy market and we focus on a case study of the central western european cwe system first we present a hierarchy of models that account for unit commitment the separation of energy and reserves and the simplified representation of transmission constraints in a zonal market in order to examine the impact of these factors on efficiency in a regime of large scale renewable energy integration second we simulate operations of the cwe system under the zonal market design using a detailed instance that consists of 656 thermal generators 679 nodes and 1073 lines with multiarea renewable energy production and 15 minute time resolution zonal market operations are compared against deterministic and stochastic unit commitment using high performance computing in order to tackle the scale of the resulting models we find that market design can have an influence on cost efficiency which far exceeds the benefits of stochastic unit commitment relative to deterministic unit commitment we conduct a detailed analysis of the numerical results in order to explain the relative performance of the different models

applying the economic model of crime to child support enforcement a theoretical and empirical analysis child support noncompliance affects both the family and the taxpayer this papers models the decision to pay based on expected utility maximization the amount unpaid is determined jointly with the expected enforcement probability a two stage estimation technique requiring ordinary least squares and probit is used the author improves upon previous problems with measurement error and sex restricted data in deterrence and child support studies the treatment of endogenous deterrence variables as exogenous and the use of aggregate data he finds a joint relationship between the amount unpaid and the enforcement probability policies are suggested for increasing compliance and payments to the family copyright 1988 by mit press

intra household allocation of resources inferences from non resident fathers child support payments a large proportion of divorced and separated fathers form new partnerships the new partner s preferences are not likely to put much weight on expenditures on the man s children from his previous union thus his own and his partner s income would have different impacts on his child support payments if partners relative incomes affect bargaining power in household decisions this article exploits within father variation in the british household panel survey 1991 2005 to estimate the impacts of the intra household income distribution on child support payments and the father s welfare we find that a higher share of father s income in household income increases the probability of paying child support and its amount relative to household income

parental responses to child support obligations evidence from administrative data abstract we study parental responses to child support obligations using rich administrative data from denmark and variation in the child support formula we estimate that a 1000 dkk 160 increase in a father s obligation is associated with a 273 dkk 45 increase in his payment a higher obligation reduces father child co residence pointing to substitution between financial and non pecuniary investments further obligations increase post separation fertility among remarried fathers but have no impacts on maternal fertility or either parent s labor supply our findings suggest that government efforts to increase child investments through mandates on parents can be complicated by their behavioral responses to them

domestic violence and divorce law when divorce threats become credible the cost of divorce influences the bargaining position of spouses and thus their behavior within the marriage this study takes advantage of a major and unexpected reduction in divorce costs in spain to estimate the causal effects on domestic violence results suggest a 30 decline in spousal conflict as a consequence of the reform spousal violence is found to have decreased among couples who remained married after the modification in the law which suggests an important role for changes in bargaining within the marriage when divorce becomes a more credible cheaper option

single moms and deadbeat dads the role of earnings marriage market conditions and preference heterogeneity why do some men father children outside of marriage without providing support why do some women have children outside of marriage when they receive little support from fathers why is this behavior more common among blacks than whites we estimate a dynamic equilibrium model of marriage employment fertility and child support decisions we consider the extent to which low earnings marriage market conditions and preference heterogeneity explain nonmarital childbearing deadbeat fatherhood and racial differences in these outcomes we find the black white earnings gap and preference heterogeneity explain a substantial portion of racial differences whereas marriage market conditions are less important

divorce risk wages and working wives a quantitative life cycle analysis of female labour force participation this article develops a quantitative life cycle model to study the increase in married women s labour force participation lfp we calibrate the model to match key life cycle statistics for the 1935 cohort and use it to assess the changed environment faced by the 1955 cohort we find that a higher divorce probability and changes in wage structure are each able to explain a large proportion of the lfp increase higher divorce risk increases lfp not because the latter contributes to higher marital assets or greater labour market experience however instead it is the result of conflicting spousal preferences towards the adjustment of marital consumption in the face of increased divorce risk the dramatic increase in the second half of the twentieth century in married women s labour force participation lfp has given rise to a large and growing literature that explores the roles of the multiple forces that led to this evolution some explanations have emphasised technological change in the household greenwood et al 2005 or in medical contraceptive technology goldin and katz 2002 albanesi and olivetti 2009a b knowles 2007 other explanations have emphasised changes in the wage

child support and partnership dissolution this article studies the determinants of partnership dissolution and focuses on the role of child support we exploit the variation in child support liabilities and entitlements driven in part by the introduction of a new set of complex rules that determined child support liability in the uk and by their interaction with welfare rules our panel has the virtue that the post 1993 variation in child support liability for all couples in partnerships formed prior to 1993 is unanticipated we find strong evidence that the resulting large child support liabilities significantly reduced dissolution risks

the organization of relational contracts the allocation of rights in franchising abstract franchising contracts are designed to bring together two kinds of entrepreneurs the franchiser and the franchisee and to maintain their relationship in the long run in contrast to standard exchange contracts in law which are specifically designed to bring about the completion of an exchange efficiently franchise contracts are designed to make it possible for the entrepreneurs to initiate to maintain and to eventually terminate their relationship without dispute the research reported in this article is an attempt to see how the dual purpose of franchising contracts are achieved the article first describes the internal organization of franchise contracts what we called the micro contractual aspects and how different kinds of rights and obligations are allocated to accomplish these multiple ends the second part of the article provides an empirical examination of 30 franchise contracts to see if the internal organization of the contracts influence both the expansion of the franchise operations through new franchises and the amount of dispute between the two sides of franchise contracts every franchise contract includes a set of provisions that define the commencement termination and ongoing operations of franchise relations the internal organization of franchise contracts specifies what kinds of rights and obligations are distributed to the parties and the nature of this allocation within each domain of provisions we argue that the commencement and termination aspects of franchise contracts are usually written in order to make the relationship between the parties clear and the contingencies specific in these provisions the contract is written in discrete terms in which each party s rights and duties are specifically delineated the contractual provisions dealing with the ongoing operations and the conduct of the parties on the other hand cannot be made specific because it is impossible to define all the future contingencies and possible business opportunities under these conditions the contract is usually written in relational terms in which each party s rights and obligations are defined in terms of powers and liabilities towards each other rather than in terms of specific duties and rights one critical consequence of writing contracts that include powers and liabilities however is that it may lead to disputes and undesirable conflict that are detrimental to the success of the franchise in order to deal with these conflicts among the parties the contract needs to specify conflict resolution mechanisms that are an integral part of franchise contracts these general arguments are tested with the use of 30 randomly selected franchise contracts from a diverse set of businesses our results show that indeed different parts of franchise contracts allocate rights and obligations differently and the more relational a contract becomes the more likely that it would include various dispute resolution mechanisms we also found that the success of a franchise contract which is measured by the number of legal disputes it generates and the growth of franchised units is influenced by the existence of relational provisions and the explicit dispute resolution mechanisms included in the contract we recommend that franchise contracts should be written to make the commencement and termination aspect of the relationship as discrete as possible the operations and conduct provisions of the contract on the other hand should be written in relational terms to give the parties the ability to respond to changes in business conditions without renegotiating the contract it is usually the tendency on the part of franchise lawyers to write discrete contracts that attempt to specify every conceivable contingency to avoid future disputes we argue here that a better strategy is to limit the discrete aspects of the contract to the commencement and termination clauses and to concentrate more on the dispute resolution mechanisms that can become an integral part of the contract thus we also recommend that various dispute resolution mechanisms such as franchisee associations franchisee councils and third party arbitration should be set up within the contract to address the possible disputes early on rather than to wait for potentially very costly court proceedings for both parties

a single settlement energy only electric power market for unpredictable and intermittent participants we discuss a stochastic programming based method for scheduling electric power generation subject to uncertainty such uncertainty may arise from either imperfect forecasting or moment to moment fluctuations and on either the supply or the demand side the method gives a system of locational marginal prices that reflect the uncertainty and these may be used in a market settlement scheme in which payment is for energy only we show that this scheme is revenue adequate in expectation

organization form residual claimants and corporate control eugene fama and michael jensen s treatment of the separation of ownership and control is both insightful and informative it deepens our understanding of corporate control and the analysis of residual claimants usefully extends the economics of internal organization to include partnerships mutuals nonprofits and the like the basic argument is this specialized governance structures arise in response to the efficiency needs of each type of organization this is an important argument and one with which i broadly concur they couple this however with a strong suggestion that these structures have reached a high degree of refinement on which account there is not now if indeed there ever has been an organization control problem with which scholars and others are legitimately concerned on this point i have grave doubts my discussion of the paper addresses three issues what is the relation if any of the hierarchical organization of the firm to economic performance what relation if any does residual claimant status have to the composition and character of the board of directors and is there now or has there ever been a corporate control problem i deal with each of these issues in order

yours mine and ours do divorce laws affect the intertemporal behavior of married couples divorce laws establish spouses individual property rights over household resources and determine when divorce is allowed this paper examines how such laws inuence the intertemporal behavior and the welfare of u s married couples i build a model of household choice about consumption labor supply and divorce under multiple divorce law regimes and i estimate it using exogenous variation in u s divorce laws from the 1970s to the 1990s couples responded to equal division of property and unilateral divorce by increasing tangible assets up to 19 which suggests the presence of a strong income eect for the primary earner and by reducing female employment by over 5 percentage points because the threat of divorce granted additional bargaining power to married woman the bargaining weight of women implied by these responses in the model corresponds to a third of the weight of men this indicates that equal division of assets beneted women when it was

simulating the impact of wind production on locational marginal prices this paper analyzes the impact of wind production on the locational marginal prices of a fully competitive pool based electricity market wind productions are modeled as negative loads and characterized by historical data records the analysis pertains to the structural relationship between wind production and locational marginal prices and disregards the collateral effect of strategic offering the study presented allows a statistical characterization of locational marginal prices as a function of the statistical data of the wind plants and the structure of the considered electric energy system

welfare child support and strategic behavior do high orders and low disregards discourage child support awards qualitative research has documented strategic behavior in response to child support policy parents of children on welfare have an incentive to avoid formal child support since most states limit the amount of formal child support that women on welfare can receive the disregard and have relatively high child support orders for low income fathers this pa per develops a simple model to make several predictions about how the disregard and order might interact to influence formal child support or ders using data from the cps css merged with state child support vari ables i find some evidence that higher orders and lower disregards are associated with fewer child support orders

market failures of market coupling and counter trading in europe an illustrative model based discussion the horizontal integration of the energy market and the organization of transmission services remain two open issues in the restructured european electricity sector the coupling of the french belgian and dutch electricity markets the trilateral market in november 2006 was a real success the extension of the system to germany in november 2010 also proceeded smoothly and the intent is to continue with the same market architecture but market coupling is based on a zonal system which has often failed in meshed grids this may cast doubts on what will happen in the future when electricity demand picks up again and wind develops the nodal system has generally been more successful than zonal architectures but its implementation is not currently foreseen in the eu this paper analyzes versions of market coupling that differ by the organization of counter trading while underplayed in current discussions counter trading could become a key element of market coupling as its geographic coverage expands and wind penetrates we simplify matters by assuming away strategic behavior between the energy and counter trading markets and conduct the analysis on a stylized six node example taken from the literature we simulate market coupling for different assumptions of zonal decomposition and coordination of transmission system operators tsos we show that these assumptions matter even in the absence of strategic behavior market coupling can be quite vulnerable to the particular situation on hand countertrading can work well or completely fail and it is not clear beforehand what will prevail our analysis relies on standard economic notions such as social welfare and generalized nash equilibrium but the use of these notions is probably novel the nodal organization is the reference first best scenario different zonal decompositions and degrees of coordination are then studied with respect to this first best solution

unilateral divorce the decreasing gender gap and married women s labor force participation married women s labor force participation lfp increased dramatically in the united states between the 1940 and 1960 cohort the two cohorts lived under different divorce regimes unilateral divorce rather than mutual consent the 1960 cohort also had a lower gender wage gap we use a quantitative dynamic life cycle model of endogenous marital status calibrated to key statistics for the 1940 cohort to study the effects of these two changes we find that both drivers combined are able to account for over 50 percent of the increase in married women s lfp and also generate large movements in marriage and divorce rates

pricing electricity in pools with wind producers this paper considers an electricity pool that includes a significant number of wind producers and is cleared through a network constrained auction one day in advance and on an hourly basis the hourly auction is formulated as a two stage stochastic programming problem where the first stage represents the clearing of the market and the second stage models the system operation under a number of plausible wind production realizations this formulation co optimizes energy and reserve and allows deriving both pool energy prices and balancing energy prices these prices result in both cost recovery for producers and revenue reconciliation a case study of realistic size is used to illustrate the functioning of the proposed pricing scheme

personality traits intra household allocation and the gender wage gap abstract a model of how personality traits affect household time and resource allocation decisions and wages is developed and estimated in the model households choose between two behavioral modes cooperative or noncooperative spouses receive wage offers and allocate time to supplying labor market hours and to producing a public good personality traits measured by the so called big five traits can affect household bargaining weights and wage offers model parameters are estimated by simulated method of moments using the household income and labor dynamics in australia hilda data personality traits are found to be important determinants of household bargaining weights and of wage offers and to have substantial implications for understanding the sources of gender wage disparities

wind farm portfolio optimization under network capacity constraints in this article we provide a new methodology for optimizing a portfolio of wind farms within a market environment for two market designs exogenous prices and endogenous prices our model is built on an agent based representation of suppliers and generators interacting in a certain number of geographic demand markets organized as two tiered systems assuming rational expectation of the agents with respect to the outcome of the real time market suppliers take forward positions which act as signals in the day ahead market to compensate for the uncertainty associated with supply and demand then generators optimize their bilateral trades with the generators in the other markets the nash equilibria resulting from this signaling game are characterized using game theory the markowitz frontier containing the set of efficient wind farm portfolios is derived theoretically as a function of the number of wind farms and of their concentration finally using a case study of france germany and belgium we simulate the markowitz frontier contour in the expected cost risk plane

testing among models of intrahousehold resource allocation households are the locus for much economic decision making households function as producers investors in human and physical capital managers of risk and as consumers many resources are allocated within households and the effects of many policies depend on the dynamics of household decision making for example household decisions about allocating food among individual household members may determine who benefits from programs to improve health nutrition or welfare in many microeconomic studies the household is treated as an individual for analytical purposes in other words it is assumed that a household acts as a single entity with a single set of preferences recently however a number of economists have recognized that households are sites of conflict as well as cooperation and have begun to use new classes of models to explain how resources are allocated among household members this literature has especially improved our understanding of households in which income is not completely pooled in such a setting standard household models may offer misleading conclusions about the effects of policies on individual household members i this paper goes beyond recent surveys of intrahousehold issue by explicitly examining the assumptions predictions and empirical implications of different intrahousehold models in particular it analyzes empirical tests that distinguish among competing models by clarifying the similarities and differences among alternative models this paper also clarifies what has actually been demonstrated and what has not been demonstrated by previous empirical studies in so doing the paper points to specific topics in need of further research this paper is organized as follows section 2 analyzes the assumptions and predictions of each of the five main classes of intrahousehold resource allocation models section 3 describes empirical tests of these assumptions along with an analysis of empirical work that has been generated sections 4 and 5 discuss the questions that remain unanswered and directions for future research

marital division of labor with risk of divorce the role of voice enforcement of contracts it is assumed that emotional ties can be relied on to enforce implicit marital contracts by voice therefore in the present model divorce has economic consequences not only because the economies of scale from living together are destroyed but also because the scope for such voice enforcement is weakened moreover perhaps surprisingly i find that it is ambiguous how an increase in the probability of divorce influences predivorce allocation of time even when preferences are assumed to be homothetic

can adequate child support be legislated responses to guidelines and enforcement i introduction in response to the high levels of poverty faced by children of divorced parents federal and state governments adopted a number of policies during the 1980s aimed at increasing child support awards and payments these laws required all states to have numerical child support guidelines to be used by parents who could not agree on their own and to increase state enforcement of delinquent child support awards implicit in much of the policy discussion about divorce is the assumption that within marriage parents will jointly act in the best interest of their children but that after divorce children may not be adequately provided for and legislative action is required in the extreme this view is represented by the stereotype of the deadbeat dad a term that describes a father who doesn t care enough about his children to continue any involvement with them either in terms of time or money similarly economic models often assume a noncooperative outcome in which the non custodial father will not provide what he did during marriage e g weiss and willis 1985 our article makes several contributions to the literature on the determinants of child support by absent fathers in contrast to almost all of the work on this topic that has been based on noncooperative models we develop a theoretical model in which some families may be able to achieve a cooperative outcome which increases the total resources available to children in particular our model identifies three different types of outcomes 1 cooperative and self enforcing 2 noncooperative and self enforcing and 3 noncooperative and state enforced each of these outcomes has different implications for the well being of children and for the level of government involvement in divorce settlements we then derive the conditions under which families can achieve each of these outcomes and we specifically model how policy variables affect whether or not a particular outcome is achieved the levels of payments and levels of compliance conditional on the type of outcome our empirical work provides reduced fo rm evidence that is consistent with a model that distinguishes these different types of outcomes and we find that policies can affect the type of outcome as well as the level of child support awards and payments section ii of this article provides background and motivations for our topic we develop a general theoretical framework in section iii and compare outcomes under assumptions of symmetric versus asymmetric information section iv incorporates the legal environment by modeling the impact of guidelines and state enforcement efforts on the probability the custodial parent cp will impose the guidelines the level of child support awards and the noncustodial parent s ncp s compliance in section v we interpret comparative statics section vi examines the determinants of reduced form models of the probability of a court ordered child support award and shows that the predictions of the model are consistent with data on the characteristics of divorce settlements and parental behavior for those with voluntary versus court ordered settlements a summary of the findings and policy implications concludes ii background and motivation in contrast to the marriage literature which predominately uses cooperative bargaining models the literature on divorce generally assumes that divorcing parents are unable to reach cooperative agreements for example weiss and willis 1985 model parental expenditures on children after divorce as a principal agent problem in which the absent father cannot verify the child expenditures made by the mother this problem of asymmetric information leads to an inefficient noncooperative outcome del boca and flinn 1995 also use a noncooperative model to examine the government s choice of compliance outcomes others have analyzed compliance with child support awards using an economics of crime framework beron 1988 beller and graham 1991 chambers 1979

the evolution of transaction governance in the tectile clothing industry abstract this paper argues that the structural evolution of the textile clothing industry is mainly the result of organizational innovations to economize on transactional costs and increase the dynamic efficiency of firms the rise of managerial hierarchies in the coordination of diversified activities the drop in the number of vertical hierarchical arrangements and the diffusion of intermediate governance structures are the main changes in industrial organization there is evidence from the italian industry which supports this trend

interactions between unmarried fathers and their children the role of paternity establishment and child support policies nonmarital childbearing has increased substantially over the last few decades comprising almost one third of all births in the united states in 1995 u s department of health and human services 1997 poverty rates for these children are high and many rely on public assistance reducing nonmarital childbearing and increasing responsibility of absent fathers were important goals of the 1996 welfarereform legislation and earlier state and federal child support legislation although there is some evidence that paternity establishment efforts increase the likelihood of child support awards cynthia miller and irwin garfinkel 1999 argys et al 2001 until recently microdata to assess the determinants and consequences of paternity were not available we use the national longitudinal survey of youth 1997 cohort nlsy97 to explore the determinants of paternity and the relationship between paternity and father involvement such as child support awards and contact between fathers and children our data show that paternity is associated with increases in all types of involvement however if the correlation is due solely to unobserved heterogeneity then paternity policies would not have a causal effect on involvement in this paper we model the paternity and father involvement decisions jointly our results suggest that welfare child support and paternity policies do alter the probability of establishing paternity and that exogenous increases in paternity can affect father child interactions i background

the economics of child custody i develop a model of marriage in which spouses decide on investments in child quality during marriage and on the allocation of child custody should they divorce the custodial allocation determines the share of the marital surplus each spouse appropriates which in turn influences spouses investment incentives the custodial allocation therefore has both distributional and efficiency consequences i derive the equilibrium investments and optimal custodial allocation and identify three channels through which making divorce easier affects child welfare investments in child quality during marriage the likelihood of divorce and the allocation of custody if divorce occurs

household bargaining over fertility theory and evidence from malaysia we develop and test a model of household bargaining over fertility when transfers between spouses are possible the model makes precise how the fertility preferences of each spouse translate into fertility outcomes we show this depends on whether or not spouses can commit to their future actions within marriage if couples bargain with commitment fertility outcomes take account of both spouses fertility preferences and do not depend on the threat point in marital bargaining if couples bargain without commitment the influence of each spouse s fertility preference on fertility outcomes depends on the relevant threat point in marital bargaining and the distribution of bargaining power we test the models using household data from the malaysia family life survey this data set contains information on each spouse s desired fertility level as well as fertility outcomes we exploit differences in threat points in marital bargaining across ethnic groups to help identify the underlying bargaining model the evidence suggests couples bargain without commitment

the choice of organizational form the case of franchising abstract we examine companies that franchise some units and centrally operate own others the agency problems confronting these two organizational forms are analyzed testable hypotheses are developed the empirical results support the notion that owning versus franchising reflects a trade off among agency related problems the cost of monitoring store managers appears to be especially important in the own franchise decision the level of repeat business and initial investment requirements per unit also appear to be important

an examination of opportunistic action within research alliances evidence from the biotechnology industry abstract like a photographer trying to take a perfect picture an entrepreneur trying to increase the odds of survival must learn very quickly that focus is everything and what demands an entrepreneur s immediate focus is the development of new products entrepreneurial ventures depend on the rapid creation of new products to gain access to early cash flows create legitimacy grab early market share and increase their odds of survival schoonhoven eisenhardt and lymman 1990 however the increasing costs and complexity of new product development are making it difficult for entrepreneurial ventures to contain the assets needed for successful r d within their boundaries forcing them to reach beyond their borders to access resources barley et al 1992 document the use of more than 900 contractual research agreements within the biotechnology industry alone recent research has also found a positive relationship between the use of alliances in the r d process and the rate of new product development deeds and hill 1996 shan walker and kogut 1994 this particular study focuses on the use of relational contracts in the r d process and extends the prior work on relational contracts to create an explanatory model of the deterrents to opportunism within a relational contract the article begins with a discussion of the traditional modes of deterring opportunism and of modes of deterring opportunism based on the development of a strong cross boundary relationship from this discussion hypotheses are derived that relate certain characteristics of the alliance frequency of communication strength of contractual deterrents hostage investments age of the relationship etc to the level of opportunism within the relationship these hypotheses are then tested on a sample of 109 research alliances in the biotechnology industry we found significant evidence that a strong relationship between the partners serves as a much more effective deterrent to opportunistic action than the creation of hostage investments or contingent claims contracts in particular the results for frequency of communication and the background of the firm highlight the importance of the top management team s understanding and involvement in the management of research alliances the strong results for background congruence indicates the importance of shared expectations and understandings between the partners the strong empirical results for the hypothesized u shaped relationship between age and opportunism provide support for the existence of both a honeymoon period in the relationship and a liability of adolescence among research alliances the data also suggest that the honeymoon period for an alliance will last about 4 6 years we also find that the honeymoon period for alliances that are of little importance to the future of the firm is only 4 1 years and in our sample of alliances that were important to the future of the firm the honeymoon period extended from 4 6 years to 6 1 years

the impacts of transmission topology control on the european electricity network the european union is targeting a 20 share of energy from renewable resources by 2020 and this increase is in turn expected to lead to operational challenges that will require various congestion management actions by system operators in this paper we deal with topology control of the transmission network as a congestion management resource and evaluate the impacts of topology control on the european electricity network to do this we co optimize unit commitment and transmission switching over 24 h and we use a decomposition scheme to tackle the resulting large scale problem our analysis is conducted on different scenarios of load and renewable power generation we find that topology control results in significant cost savings within europe which tend to be inversely related to net load the robustness of our results is supported by an extensive sensitivity analysis

divorce and the cognitive achievement of children children of divorced parents exhibit lower test scores and educational attainment have these correlations a causal interpretation parents who divorce may be less likely to invest in their children while together or they may divorce to shield their children from the effects of marital conflict i study the relationship between children s achievement and the marital status of their parents within a dynamic framework in which partners decide on whether to remain married how to interact with or without conflict and child investments i then assess whether a child whose parents divorced would have been better off had divorce not occurred

a stackelberg model of child support and welfare this article models the child support and welfare decisions of never married parents on welfare as a stackelberg game the mother chooses whether to exit welfare report paternity and to obtain a formal child support order if a child support order is obtained the father chooses whether to comply with the order simulation results from the structural parameters indicate that increasing the child support disregard increases paternal compliance slightly and affects maternal paternity reporting more significantly effects are limited however by low paternal incomes results also indicate that high award amounts can decrease expected child support payments to women on welfare

intra family distribution of paid work time this article analyses the intra family distribution of paid work time in five european countries france germany italy spain and the uk to that end we formulate a collective model which allows us to characterize the efficient labour supply decisions of each spouse this two equation model is then simultaneously estimated by using national panel data drawn from the european community household panel echp 1994 2001 empirical results clearly show that in all sample countries the labour supply of wives is affected by own wages household and own nonlabour incomes and the number of children whereas evidence for husbands differs across countries

differntial fecundity markets and gender roles women are fecund for a shorter period of their lives than men this paper investigates how differential fecundity interacts with marriage labor and financial markets to affect gender roles the main findings of the paper are as follows i fecund women are relatively scarce men will behave differently than women in response to this scarcity in the most fundamental way demand and supply conditions in the marriage market affect gender roles ii differential fecundity does not have any market invariant gender effect gender roles depend on the way in which marriage labor and financial markets interact iii gender differences in the labor market can occur without corresponding differences in labor market opportunities productivities in child rearing or social norms iv with uncertainty in human capital accumulation and no insurance against this uncertainty the model s predictions are consistent with observed gender roles

child support welfare dependency and poverty female headed families have among the highest poverty rates of any major demographic group in the united states the purpose of this paperis to investigate empirically the effectiveness of current child support enforcement policies and to determine their role in reducing poverty and welfare dependency a special supplement to the april 1982 current population survey provides the data for the analysis the results indicate that child support enforce ment may represent an effective means for re ducing welfare program costs but isunlikely to have a dramatic effect on either welfare de pendency or poverty copyright 1986 by american economic association

transfers to households with children and child development in this paper we utilize a model of household investments in the development of children to explore the impact of various transfer policies on the distribution of child outcomes we develop a cost criterion that can be used to compare the cost effectiveness of unrestricted restricted and conditional cash transfer systems and find that an optimally chosen conditional cash transfer program is the most cost efficient way to attain any given gain in average child quality we explore several design elements for the conditional cash transfer system and discuss the role of production function uncertainty and measurement error

economic and environmental implications of different approaches to hedge against wind production uncertainty in two settlement electricity markets a pjm case study abstract this paper examines the economic and environmental outcomes of four two settlement electricity market clearing designs the first design corresponds to a deterministic market clearing dmc similar to the mechanism currently used in organized wholesale electricity markets in the united states the other three designs account for the day ahead da wind power production uncertainty into the da market mechanisms either implicitly or explicitly an augmented deterministic market clearing admc design introduces da ramp capability products these products ensure adequate and ramp feasible electricity generation capacity commitments in the da stage to cope with the real time realization of wind power generation a hybrid deterministic market clearing hdmc design augments admc by explicitly integrating a characterization of wind power production uncertainty into the residual unit commitment ruc process which is run after the da market is closed using stochastic programming the last design referred to as stochastic market clearing smc uses stochastic optimization to explicitly account for wind power production uncertainty in the da market clearing mechanisms i e da unit commitment and economic dispatch the four market clearing designs are assessed by simulating the electricity market operations of a test system and comparing their results in terms of operating costs prices costs and revenues of different types of producers consumer s payments integration of wind power and air emissions the test system has 12 of the capacity of pjm s fossil fired power generation fleet and uses data on coincident demand and wind power production from the bonneville power administration bpa system during years 2010 2014 the simulations are performed hourly for a whole year results show that smc is superior as its costs reductions are more than two times the improvements attained by admc and hdmc also smc results in electricity prices that are better aligned with operation costs cuts the spread between the day ahead and real time prices by 40 reduces out of market short term revenue sufficiency payments by 58 reduces co2 emissions by 3 52 and decreases power plants cycling hdmc is a distant second best market design relative to dmc it achieves a reduction in total costs that is less than half the reduction achieved by smc a reduction in out of market payments that is 80 of the reduction attained by smc and an increase in wind power integration that is

germany s nuclear power plant closures and the integration of electricity markets in europe this paper examines the potential implications of national policies that lead to a sudden increase of wind power in the electricity mix for interconnected european electricity markets more specifically it examines market integration before and after the closures of eight nuclear power plants that occurred within a period of a few months in germany during 2011 the short and long run interrelationships of daily electricity spot prices from november 2009 to october 2012 in apx endex belpex epex de epex fr nordpool omel and swissix and wind power in the german system are analysed two mgarch multivariate generalized autoregressive conditional heteroscedasticity models with dynamic correlations are used to assess spot market behaviour in the short run and a fractional cointegration analysis is conducted to investigate changes in the long run behaviour of electricity spot prices results show positive time varying correlations between spot prices in markets with substantial shared interconnector capacity a negative association between wind power penetration in germany and electricity spot prices in the german and neighbouring markets and for most markets a decreasing speed in mean reversion

family policy with non cooperative families we consider a non cooperative model of a family s time allocation between market work and providing a home produced family public good such as child care or care for the elderly the model predicts underprovision of the public good because of crowding out this does not necessarily warrant public provision in contrast to other approaches in family economics we find that attempts to redistribute between spouses may alter the final distribution within the marriage and that such a policy may be pareto improving we also find that some degree of progressivity of the income tax can be welfare improving

child support payment behavior an econometric decomposition growing concern about the cost to families and society from child support noncompliance has resulted in a flurry of scholarly articles and in welfare reform legislation addressing child support the attention has been drawn from reports showing that almost 2 3 million women of the 4 4 million owed support in 1985 did not receive all they were owed many receiving no payment at all 17 the implications of this are far reaching it is well known that over half of all female headed families have children in poverty and many of these families will end up drawing aid to families with dependent children payments child support could help shift the burden from general tax revenues to the responsible father for the family the benefits of additional income may result in reduced stress on the mother and less disruption in the lives of the children taking a longer run view greater family income has been linked to more years of schooling and higher wage rates in the early part of a child s career 7 higher payments of child support then may serve to increase current parental income and help reduce future poverty in this paper we use a more efficient estimator to model child support behavior than has been used the technique allows the extraction of more information from the data than previously has been possible in particular the marginal impact of changes in variables on the probability of being a nonpayer partial payer or full payer and on the expected amounts paid we show the usual practice of combining individuals who only pay a part of their order with those who pay all of their order into one group may lead to misleading policy conclusions the combining of these groups does give a sense of the total amount that can be collected across individuals often as important though are compliance issues centered on those not paying all of their support order while attention has been paid to those paying none of their order partial payers have been ignored in the literature in the course of our work we find support for the effectiveness of the federal child support enforcement program csep in increasing compliance with support

comparing the costs of intermittent and dispatchable electricity generating technologies economic evaluations of alternative electric generating technologies typically rely on comparisons between their expected life cycle production costs per unit of electricity supplied the standard life cycle cost metric utilized is the levelized cost per mwh supplied this paper demonstrates that this metric is inappropriate for comparing intermittent generating technologies like wind and solar with dispatchable generating technologies like nuclear gas combined cycle and coal levelized cost comparisons are a misleading metric for comparing intermittent and dispatchable generating technologies because they fail to take into account differences in the production profiles of intermittent and dispatchable generating technologies and the associated large variations in the market value of the electricity they supply levelized cost comparisons overvalue intermittent generating technologies compared to dispatchable base load generating technologies they also overvalue wind generating technologies compared to solar generating technologies integrating differences in production profiles the associated variations in the market value of the electricity supplied and life cycle costs associated with different generating technologies is necessary to provide meaningful comparisons between them this market based framework also has implications for the appropriate design of procurement auctions created to implement renewable energy procurement mandates the efficient structure of production tax credits for renewable energy and the evaluation of the additional costs of integrating intermittent generation into electric power networks

the effects of in work benefit reform in britain on couples theory and evidence this paper examines the effects of the working families tax credit wftc on couples in britain we develop a simple model of household decisions which explicitly accounts for the role played by the tax and benefit system its main implications are then tested using panel data from the british household panel survey collected between 1991 and 2002 overall the financial incentives of the reform had negligible effects on a wide range of married mothers decisions such as eligible working at least 16 hours per week and full time employment working at least 30 hours per week employment transitions childcare use and divorce rates women s responses however were highly heterogeneous depending on their partners labour supply and earnings mothers married to low income men showed larger responses in employment especially if they had younger children they were more likely to remain in the labour force and had higher rates at which they entered it while more likely to receive the tax credit they also experienced a greater risk of divorce we find virtually no effect for women with higher income husbands likewise there are no statistically significant responses among married men