Bride Price, Circumstance-Contingent Repayment, and Marital Investment in China: A Two-Stage Investment and Nash Bargaining Model

Information from the abstract

This paper develops a two-stage investment-and-bargaining model of marital behavior under circumstance-contingent bride-price repayment in China. In Stage 1, spouses simultaneously choose relationship-specific investments in a non-cooperative game. In Stage 2, after investments and the legally relevant state are realized, they divide marital surplus according to a generalized Nash bargaining solution with divorce as the fixed disagreement outcome. Under the benchmark legal-state mapping, the legal rule shifts the wife’s investment incentives directly because observable consequences of her investment can affect anticipated repayment and hence her future disagreement payoff; the husband’s own investment condition contains no analogous direct legal-return term. Under a quadratic-linear specification, the best-response slopes have the sign of the technological interaction parameter, so technological complementarity generates strategic complementarity and technological substitutability generates strategic substitutability. A larger bride price, as a partial effect holding the anticipated repayment schedule fixed, or a steeper circumstance-contingent schedule shifts the wife’s best response outward. The husband’s equilibrium investment then rises under strategic complementarity and falls under strategic substitutability. Within the maintained agreement, affine-branch, positive-determinant, and strict-interiority regime, the quadratic-linear model has a unique Stage-1 Nash equilibrium, and the legal return can reduce, eliminate, or reverse the wife’s direct marginal hold-up wedge. The analysis illustrates how a legal rule affecting a future disagreement payoff can reshape pre-bargaining strategies.

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Related topics: Family Dynamics and Relationships · Demographic Trends and Gender Preferences · Evolutionary Psychology and Human Behavior