Dnes, Antony W. --- "Partnering and Incentive Structures" [2011] ELECD 598; in Cohen, R. Lloyd; Wright, D. Joshua (eds), "Research Handbook on the Economics of Family Law" (Edward Elgar Publishing, 2011)

Book Title: Research Handbook on the Economics of Family Law

Editor(s): Cohen, R. Lloyd; Wright, D. Joshua

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848444379

Section: Chapter 6

Section Title: Partnering and Incentive Structures

Author(s): Dnes, Antony W.

Number of pages: 10

Extract:

6 Partnering and incentive structures
Antony W. Dnes


INTRODUCTION

The previous fifty years are associated with growth of divorce, decline in marriage,
increased unmarried intimate cohabitation, and the delaying of marriage and childbirth
to a later age. These and similar trends in many societies have all caused concern in recent
years, particularly for the welfare of children. Additionally, there has been recent pressure
to extend marriage rights to same-sex couples. All of these changes raise questions in rela-
tion to the operation of underlying incentive structures. From an economic perspective,
major issues arise concerning the impact of changes in the law of marriage and divorce.
Much depends upon the vulnerability of one married or cohabiting partner to oppor-
tunistic behavior by the other. This chapter is specifically concerned with the impact on
incentives of current socioeconomic and socio-legal changes affecting partnering.
Underlying the incentive structures in intimate partnerships, we find a potential
problem of exploitation by one partner. This can arise if long-term promises of pecuni-
ary and non-pecuniary support induce detrimental reliance, such as one partner's giving
up work to become a homemaker, in expectation of benefits such as legal or beneficial
ownership of property. Under weak enforcement of promises, a high-earning partner
could opportunistically promise and then subsequently renege. Easy divorce law, with
less-than-expectations damages obligations, can be predicted to create such adverse
incentive structures for married partners: a "greener-grass" effect (Dnes 1998; Dnes and
Rowthorn 2002) that will ...