Wednesday, December 30, 2015

Boettke et al. on Wife Sales

Peter J. Boettke,  Peter T. Leeson, and Jayme S. Lemke, George Mason University, have posted Wife Sales, which appeared in the Review of Behavioral Economics 1 (2014): 349-379:
For over a century, English husbands sold their wives at auctions. We argue that wife sales were an institutional response to an unusual constellation of property rights in Industrial Revolution-era English law. That constellation simultaneously required most wives to obtain their husbands’ consent to exit their marriages and denied most wives the right to own property. In doing so it precluded direct Coasean divorce bargains between spouses that could dissolve inefficient marriages when wives’ valuation of life outside their marriages was higher than husbands’ valuation of life inside them. To overcome this problem, spouses used wife sales to conduct divorce bargains indirectly. Wife-sale auctions achieved this by identifying and leveraging “suitors” — men who valued unhappy wives more than their current husbands, who unhappy wives preferred to their current husbands, and who had the property rights required to buy unhappy wives’ right to exit marriage from their husbands. The resulting transactions enabled unhappy wives in inefficient marriages to exit those marriages where English law otherwise prevented them from doing so.

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