Monday, March 5, 2007

The Market for Marriage: Why Prenups are Good

This is funny:

Tim Hartford in today's Financial Times:

"Marriage is a market. There is a supply, there is a demand. Markets work better when contracts work too. Economists know perfectly well that one of the many reasons why marriage has always been popular is that it is economically efficient. It is based on the division of labor...one spouse brings home the bacoon, the other cooks it. It is a joint effort, an efficient one - and one under serious threat if the contract is ambiguous...A good pre-nuptial agreement should be able to specify one of the many reasonable ways in which things will be resolved if the marriage does not work out. If she is a financial powerhouse and he is a toy boy, marriage need not be beyond them: the prenup can fix compensation arrangmenets, by the hour if necessary. It is not romantic but neither is a messy divorce."

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