Essays on intrahousehold bargaining, risk-sharing, and the optimal balance between private insurance and the welfare state
Creightney, Cavelle D., 1965- (2000) Essays on intrahousehold bargaining, risk-sharing, and the optimal balance between private insurance and the welfare state. PhD thesis, University of Warwick.
WRAP_THESIS_Creightney_2000.pdf - Submitted Version
Download (8Mb) | Preview
Official URL: http://webcat.warwick.ac.uk/record=b1369162~S1
This thesis comprises three essays in the field of applied microeconomic theory. In
the first essay we present a generalized Nash model of household decision making that
does not restrict a priori the household's location on the Pareto frontier and that allows
the opportunity cost of household membership to influence the intrahousehold allocation
of resources. This approach generalizes both the collective and the symmetric Nash
models of household decision making. Formally, we derive the restrictions on household
demands implied by the generalized Nash model and we show that the collective model,
the symmetric Nash model and the traditional (unitary) model of the household are all
special cases of the generalized Nash model.
In the second essay we analyze the optimal risk-sharing contract to emerge between
two risk averse individuals under repeated double moral hazard. Several interesting
properties of the optimal contract emerge. First, the contract is less sensitive to the
performance of any single individual than would have been the case under single moral
hazard. Second, a well-known condition describing the optimal level of intertemporal
consumption smoothing under repeated single agency is generalized to take account of
the double incentive problem. In particular, when both individuals face binding incentive
constraints then the expectation of the ratio of person i's to person j's marginal utility
in period t is strictly greater than the known ratio of person i's to person j's marginal
utility in period t - 1, i,j = 1,2, i /= j.
In the final essay we examine the optimal balance between the provision of income
insurance through family networks and provision through the redistributive tax system.
We demonstrate that even when there is full risk-sharing within the family there are nevertheless
further welfare gains to be achieved through an appropriate level of government
intervention. We also demonstrate that where intra-family moral hazard implies that
only partial risk-sharing is achieved within the family, the existence of further welfare
gains from government intervention will depend on the effects of such intervention on the
intra-family income transfer and on effort incentives.
|Item Type:||Thesis or Dissertation (PhD)|
|Subjects:||H Social Sciences > HB Economic Theory|
|Library of Congress Subject Headings (LCSH):||Microeconomics, Households -- Economic aspects, Risk (Insurance)|
|Official Date:||November 2000|
|Institution:||University of Warwick|
|Theses Department:||Department of Economics|
|Supervisor(s)/Advisor:||Thomas, Jonathan ; Wooders, Myrna Holtz|
|Sponsors:||University of Warwick. Dept. of Economics|
Actions (login required)