Andrew Postlewaite University of Pennsylvania SBR-9511952 The P.I. proposes to extend on-going research into "marriage models" in which there is a pre-match choice of investment/savings that affects the resulting surplus the matched pair will share. The proposal has eight related sub-projects: (1) resolve technical questions on the existence of equilibrium in marriage models with savings, (2) demonstrate the impossibility of efficiently dividing the surplus in matched pairs, (3) demonstrate the existence of weak-commitment equilibrium under very general assumptions, (4) extend the marriage model to the case of only one "sex," (5) extend the marriage model to the case of more than two groups., (6) explain herd behavior in investment, (7) extend previous work on "hybrid" equilibria, and (8) investigate models in which a political process provides a nonmarket benefit to relative wealth.
