Antony W. Dnes

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Antony W. Dnes
Autonomy the Law Commissions Proposals
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Marriage CohabitationInsights from Economics
of Law

• Cohabitation and Marriage - Joint Investment of
  Human and Other Capital) with Expected Surplus.
• Life Profile Theory of Marriage (Cohen, 2002) -
  c.f. Burns
• Marriage as Standard Form Contract, Insurance,
  Signal...
• Emotional Theory Fails to Predict, e.g.
  Differences Between Groups, Impact of No-Fault
  Laws...
• Laws, Regulation, Institutions - Internalize
  Externalities
• All about Incentive Structures, Opportunism,
  Exploitation.

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Law Commission Marriage LiteChipping Away
Choice?

• Divide Retained Benefits Continuing
  Disadvantages (Sunk Costs Reliance) on
  Separation.
• Old Contract, Trusts Poor Recognition of Human
  Capital.
• But Volunteers Issue Chip Away at Choice,
  Autonomy?
• Regulation Need not Undermine Autonomy (i)
  Enforcing Discernable Promises (ii) Response to
  Changed Constraints.
• A New Contract View? FC to Complete Expectancy
  by Compensating Sunk Cost Linked to Outstanding
  Retained Benefit, Divides Remaining Benefit
• c.f. Hydraulic Engineering (QBD, 1878)
  Expectancy Includes Reliance.

4
Constrained Choice Marriage Guarantee(Akerlof,
1996)

• Women Face High Expected Costs of Unwed
  Pregnancy (P).
• (a) Demand Marriage Guarantee (PdgtP) for
  Intimacy.
• Sufficiently High a Implies Most Women Require
  Guarantee
• HPUs (Happy to be Pregnant Unmarried) Still
  Benefit from Require Guarantee
• So Many Women Require Men Give Guarantee (Male
  Benefits Lower but Still gt 0).
• 1950s World of Marriage, Engagement Intimacy,
  Stigma.
• Series of Choices, but Constrained.

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Technical Change Cohabitation (Akerlof, 1996)

• Contraception Probability of Unwed Pregnancy
  Falls
• Expected Costs (P)? - Guarantee Group (a)
  Smaller.
• Women Fail to Obtain Guarantee, even if most
  Prefer it.
• Consider HPUs - would Benefit from Marriage, but
  a is Smaller - no Longer Insist (Competition from
  (1- a) Group).
• Post-1960s Cohabitation - Driven by Technical
  Change Competition among Women - Constrained
  Choices.
• Common-Law Marriage Myth Possibly a Self-serving
  Rationalization for Both Sexes? Sense of Drift.

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Non-Rent-Seeking Arguments for Regulatory
Intervention a Matter of Life Profile

• Constraints Leave Women Open to Immiseration.
• Cohabitation - no Life-profile Linked Support
  Obligations.
• Restricting Non-obligated Cohabitation Ties
  Hands Stops Damaging Competition between
  Women.
• c.f. State Coercion Over Public Goods or
  Everyone Understates Preferences for Police,
  Military...
• All Sorts of Limits on Freedom of Contract
  (Trebilcock 1994) Child Labour, Corruption,
  Perpetuities, Easements

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Non-Rent-Seeking Arguments Negative Technical
Externality

• Not Pecuniary Externality (one gains, one
  loses).
• e.g. Instability of Cohabitation Removes Fathers
  from Home, Resulting in Child Delinquency a
  Technical Externality.
• Stabilizing Cohabitation Reduces Antisocial
  Behaviour.
• Real Effects

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Non-Rent-Seeking Arguments Completing Expectancy

• Cohabitation Intended to Share Long-term
  Surplus to Household and Market Inputs
• Returns to One Party not Protected ? he/she
  Under Invests.
• e.g. Increases Paid Work, as Insurance, not as
  Better Use of Time for Family.
• e.g. Child Delayed Owing to Family Insecurity.
• In Extreme, Some Parties Avoid Efficient
  Cohabitation.
• Efficient to Secure Returns against Sunk Costs
  More Happy People, Better Efforts.

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Opt Out?

• Opt In/Out Same if Law Known Bargaining Cost
  Low.
• Adjust Relationship Elsewhere if FC Adjudication
  Expected to Disturb - Includes No/Low Obligation
  Cohab (Coase).
• Undesirable Chilling Effect if Law Creates
  Uncertainty, or Inhibits or Deflects Bargaining.
• e.g. A Bargains Over Domestic Market Roles,
  Savings, Consumption Property - Court Expected
  to Favour A - Chills B as As Risks Were Already
  in Upfront Points.
• Enforcing Promise Warms A Chills Exploiting B
  Only.

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Obligated Cohabitation Effects on Marriage,
Cohab
Cohabitation
Single
Married
Dividing Lines May Move - Welfare Change Uncertain
?
Married
Single
Cohab

• Marriage Incentives Unchanged?
• Some Bs Deterred from Cohab?
• Some As Happier About Cohab
• - But 2 to Tango

All OK if GainsgtLosses
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An Economist Writes

• Need Welfare Focus or Run into Problems (e.g.
  Menages).
• Under Property Rule, Small-Numbers Bargaining
  Works - Need Clear Case, Beyond Give More to A,
  for Change to Liability.
• Obligations ? ? Clear Disincentive to Cohabit
  c.f. Separation.
• Implication for Marriages Benefits for Some Bs
  ? if Cohab Accepted Benefits for Matching As gt
  0 Competition from Other As Accepting Cohab ?
  Some Bs Offer Cohab, not Marriage (c.f. LC179,
  p.104) (c.f. Akerlof 1996).
• Above e.g. - Welfare Enhancing, but Marriage
  Undermining.
• Inescapable World Move to Lite - Heavy not
  a Fit?
• Unintended Promotion of Separation?