Cooperative models in action
Subtitle: simulation of a nash-bargaining model of household labor supply with taxation
By: by Olivier Bargain, Nicolas Moreau.
Contributors: Moreau, Nicolas
Series: Discussion paper ;; no. 1480; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1480
Publisher: IZA
Published: 2005
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Married people -- France.; Negotiation -- France.; Game theory.; Taxation -- France.
Description: "Several theoretical contributions, starting with McElroy and Horney (1981) and Manser and Brown (1980), have suggested to model household behavior as a Nash-bargaining game. Since then, very few attempts have been made to operationalize cooperative models of household labor supply for policy analysis. In this paper, we implement a Nash-bargaining model with external threat points (divorce) into the microsimulation of tax policy reforms in France. Following the suggestion of McElroy (1990) to achieve identification, we assume that the observation of single individuals can be used to predict outside options. Individual preferences in couples are allowed to display caring between spouses and are simulated in a way which guarantee consistency with the Nash bargaining setting, regularity conditions and observed behaviors. An extensive sensitivity analysis is provided in order to examine the various implications from using the cooperative model for tax policy analysis and the likely role of taxation on intra-household negotiation"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Includes bibliographical references.
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Mode of access: World Wide Web.