Research

Job Market Paper

Time and Income Allocation in Non-cooperative and Cooperative Families (with José A. Rodrigues-Neto)

Under review at Journal of Population Economics
Abstract: This paper studies time and income allocation in a two-agent family with altruistic preferences, home production of a public good, and voluntary transfers. We first characterize the Nash equilibrium of the non-cooperative game and compare it to the set of Pareto efficient allocations. Then, we analyze a cooperative family in which agents bargain over income shares using the non-cooperative outcome as the disagreement point. Existing non-cooperative household models (Anderberg and Rainer, 2013; Bertrand et al., 2021) show that an increase in one partner’s earning capacity can reduce the other’s welfare for a non-empty set of parameters. The central result of this paper shows that such welfare conflicts can arise even when the household cooperates. Moreover, cooperation enlarges the parameter region generating welfare conflicts. Although cooperation benefits both agents when earning capacities are fixed, it may amplify welfare conflicts when earning capacities change. These welfare conflicts may create incentives for economic sabotage within the marriage and affect marital stability.

Matching and Taxation of Status Goods: Balancing Efficiency and Rawlsian Fairness (with Rogério Mazali and José A. Rodrigues-Neto)

Abstract: This paper presents a stylized model of pure status goods with matching concerns, fixed costs for brand development and asymmetric information that leads to endogenous stratification in each one of two populations. The two populations share the same ability dispersion, which may vary across economies. A benevolent social planner adopts a mixed utilitarian–maximin social welfare criterion. The social optimum has equally sized strata, and the optimal number of brands depends on ability dispersion, brand-development costs, the signaling population’s share of match output, and the planner’s concern for inequality. A stronger concern for inequality increases the optimal degree of stratification when the signaling population’s share of match output is sufficiently large, but decreases it otherwise. We characterize equilibrium under contestable competition and monopoly, and calculate the optimal taxation in each case. In a contestable market, laissez-faire competition generates uneven strata, but a suitable progressive tax implements the social optimum. Under monopoly, a well-deliberated flat tax or subsidy implements the optimal allocation. However, the extra welfare generated by status goods is distributed differently. In a contestable market, it accrues to the matching populations, whereas under monopoly, it is captured by the monopolist.

Measuring Prudence (with Han Bleichrodt, Jason Doctor, Iván Payá, and Jingni Yang)

Childcare, Bargaining, and Grandparental Care (with José A. Rodrigues-Neto)

Marketing Competition for Status Goods (with José A. Rodrigues-Neto)