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Should We Write Prenuptial Contracts?

Rainer, Helmut (2003) Should We Write Prenuptial Contracts? Working Paper. University of Essex, Department of Economics, Economics Discussion Papers, Colchester.

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Abstract

A successful marriage requires for both parties to make investments in their relationship and marital assets. How such assets would be divided if and when the parties divorce is an important factor determining each party’s (exante) investment incentives. Using the “incomplete contracting” approach, we characterize the optimal asset division rule, one that provides the parties with the best investment incentives. We then discuss the circumstances under which the spouses would agree, in equilibrium, to write a prenuptial contract with this asset division rule. We conclude by exploring the implications of our results in the context of various asset division rules currently discussed by policy-makers.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Asset Division, Terms of Divorce, Marriage Contracts, Marital Investments and Negotiations.
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jenny Connolly
Date Deposited: 28 Aug 2014 14:13
Last Modified: 28 Aug 2014 14:13
URI: http://repository.essex.ac.uk/id/eprint/8871

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