Intra-household bargaining - AbsoluteAstronomy.com

Intra-household bargaining
Bargaining
Bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service dispute the price which will be paid and the exact nature of the transaction that will take place, and eventually come to an agreement. Bargaining is an alternative pricing strategy to fixed prices...

refers to negotiation

Negotiation

Negotiation is a dialogue between two or more people or parties, intended to reach an understanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce an agreement upon courses of action, to bargain for individual or collective advantage, to craft outcomes to satisfy...

s that occur between members of a household

Household

The household is "the basic residential unit in which economic production, consumption, inheritance, child rearing, and shelter are organized and carried out"; [the household] "may or may not be synonymous with family"....

in order to arrive at decisions regarding the household unit.

Bargaining is traditionally defined in economic terms of negotiating conditions of a purchase or contract and is sometimes used in place of direct monetary exchange. Bargaining also plays a role in the functioning and decision making of households, where agreements and decisions do not often have direct monetary values and affect various members of the household.

“The household is ‘the basic residential unit in which economic production

Production (economics)

In economics, production is the act of creating 'use' value or 'utility' that can satisfy a want or need. The act may or may not include factors of production other than labor...

, consumption

Consumption (economics)

Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined in part by comparison to production. But the precise definition can vary because different schools of economists define production quite differently...

, inheritance

Inheritance

Inheritance is the practice of passing on property, titles, debts, rights and obligations upon the death of an individual. It has long played an important role in human societies...

, child rearing

Parenting

Parenting is the process of promoting and supporting the physical, emotional, social, and intellectual development of a child from infancy to adulthood...

, and shelter are organized and carried out.’” The household is not always synonymous with family

Family

In human context, a family is a group of people affiliated by consanguinity, affinity, or co-residence. In most societies it is the principal institution for the socialization of children...

, but in the case of intra-household bargaining, in which members of the household are considered to be a unit dependent upon the functioning of each individual, the household is most commonly synonymous with a family.

Game Theory Bargaining Models

Within the household unit and in the mathematical study of game theory

Game theory

Game theory is a mathematical method for analyzing calculated circumstances, such as in games, where a person’s success is based upon the choices of others...

, scholars have defined two distinct types of bargaining: cooperative

Cooperative game

In game theory, a cooperative game is a game where groups of players may enforce cooperative behaviour, hence the game is a competition between coalitions of players, rather than between individual players...

and non-cooperative

Non-cooperative game

In game theory, a non-cooperative game is one in which players make decisions independently. Thus, while they may be able to cooperate, any cooperation must be self-enforcing....

. In cooperative bargaining models (also called collaborative decision making), the outcomes of negotiations are more equally beneficial to all members of the household, and have therefore been considered a more “natural” means of analyzing the family unit in comparison to non-cooperative models (see Pareto efficiency

Pareto efficiency

Pareto efficiency, or Pareto optimality, is a concept in economics with applications in engineering and social sciences. The term is named after Vilfredo Pareto, an Italian economist who used the concept in his studies of economic efficiency and income distribution.Given an initial allocation of...

). In non-cooperative bargaining models (also called unitary decision making), personal interests motivate individuals within the household rather than the desire to work in a collaborative manner and maximize the benefit of all household members.

Intra-Household Dynamics: Cooperation vs. Conflict

The household is traditionally described as a single economic unit

Economic unit

In an economy, production, consumption and exchange are carried out by two basic economic units: the firm and the household.# Firm#:The firm makes production decisions. These include what goods to produce, how these goods are to be produced and what prices to charge...

that “works as a group for its own good,” meaning all members of the household contribute in an altruistic

Altruism

Altruism is a concern for the welfare of others. It is a traditional virtue in many cultures, and a core aspect of various religious traditions, though the concept of 'others' toward whom concern should be directed can vary among cultures and religions. Altruism is the opposite of...

manner towards the benefit and functioning of the entire household.

Because a household is composed of various individuals, conflicts of interest

Conflict of interest

A conflict of interest occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other....

arise. These conflicts of interest make bargaining a necessary fact of household life and create a household environment that is not universally governed by altruism. These conflicts of interest have the potential to create a spectrum of intra-household dynamics, ranging from a non-cooperative to a cooperative household (which is directly reflective of game theoretic bargaining models). One extreme of this spectrum is the non-cooperative model, in which each household member acts in order to maximize his or her own utility. The opposite extreme is the cooperative model in which households act as a unit to “maximize the welfare of their members” (described above as altruism).

Bargaining Power

Bargaining power

Bargaining power is a concept related to the relative abilities of parties in a situation to exert influence over each other. If both parties are on an equal footing in a debate, then they will have equal bargaining power, such as in a perfectly competitive market, or between an evenly matched...

is “the relative capacity of each of the parties to a negotiation or dispute to compel or secure agreements on its own terms.” In general terms, “if both parties are on equal footing in a debate, then they will have equal bargaining power,” and conversely, if one party has an advantageous position in the debate, the parties have unequal bargaining power

Inequality of bargaining power

Inequality of bargaining power is a concept used in social sciences and humanities, particularly law and economics to denote the situation where freedom of contract ceases to be real and markets fail....

.

More specifically, what determines the equality or inequality of bargaining power is the relative fallback positions or “threat points” of the individuals in the bargaining process; that is, which bargainer has more to lose (economically, socially, etc.)? In the context of intra-household bargaining, an individual’s bargaining power and fallback position are defined by one’s ability to survive and thrive outside the family.

Individual Assets

The access one has to individual assets, both economic (such as property, land, wealth or ability to bring in an income) and personal (such as labor power), determines fallback position because it is directly linked to one’s capability of surviving outside the household.

Extra-household Parameters

The structural support, whether institutional or societal, an individual has outside of the household determines how capable one would be of surviving outside the household.

Individual’s rights/access to communal resources: Communal resources are entities such as village commons or public forests from which individuals and households alike may acquire resources (e.g. firewood or water) that are necessary for daily subsistence.
Existence of social support
Social support
Social support can be defined and measured in many ways. It can loosely be defined as feeling that one is cared for by and has assistance available from other people and that one is part of a supportive social network...

systems (see also social network
Social network
A social network is a social structure made up of individuals called "nodes", which are tied by one or more specific types of interdependency, such as friendship, kinship, common interest, financial exchange, dislike, sexual relationships, or relationships of beliefs, knowledge or prestige.Social...

s): Social support systems are friendship, familial, caste
Caste
Caste is an elaborate and complex social system that combines elements of endogamy, occupation, culture, social class, tribal affiliation and political power. It should not be confused with race or social class, e.g. members of different castes in one society may belong to the same race, as in India...

, and any other social groupings from which one derives emotional support, benefiting the individual’s overall health and increasing their ability to survive well outside of the household.
Support from the state and non-governmental organization
Non-governmental organization
A non-governmental organization is a legally constituted organization created by natural or legal persons that operates independently from any government. The term originated from the United Nations , and is normally used to refer to organizations that do not form part of the government and are...

s (NGOs): State and NGO support could increase an individual’s intra-household bargaining power by the creation of a social safety net
Social safety net
Social safety nets, or "socioeconomic safety nets", are non-contributory transfer programs seeking to prevent the poor or those vulnerable to shocks and poverty from falling below a certain poverty level. Safety net programs can be provided by the public sector or by the private sector...

. The work of states, NGOs, and a social safety net can increase “access to employment, assets, credit, infrastructure, etc.”
Social norms and “perceptions about needs, contributions, and other determinants of deservedness”: The social acceptability (or lack thereof) of leaving the household or living in a non-traditional household, the perceived social needs of individuals within the household, and the undervaluation of certain production, such as care work
Care work
Care work is a sub-category of work that includes all tasks that directly involve care processes done in service of others. Oftentimes, it is differentiated from other forms of work because it is intrinsically motivated, meaning that people are motivated to pursue care work for internal reasons,...

, all regulate the bargaining power an individual has within the household, because these factors directly impact the individual’s ability to survive outside the household.

Inequality in Intra-Household Bargaining Power

Unequal access to strong fallback positions creates a situation in which different individuals within the household have more or less bargaining power, and therefore have more or less influence over household decision-making. When considering the factors that determine fallback position in intra-household bargaining and what populations have access to positive fallback positions, Bina Agarwal’s

Bina Agarwal

Bina Agarwal is a prize-winning development economist and Director and Professor of Economics at the Institute of Economic Growth in Delhi. She has written extensively on land, livelihoods and property rights; environment and development; the political economy of gender; poverty and inequality;...

research in rural South Asia

South Asia

South Asia, also known as Southern Asia, is the southern region of the Asian continent, which comprises the sub-Himalayan countries and, for some authorities , also includes the adjoining countries to the west and the east...

n communities shows that in said communities women have unequal access to strong bargaining power and their interests are not reflected in household decisions.

Inequality of individual assets

In South Asian societies land is one of the most valuable individual assets that can increase an individual’s bargaining power, yet it is more uncommon and difficult for women to own land than men for a number of reasons: inheritance laws that allow women to inherit land are not strongly enforced, in order to own land individuals must obtain a certain level of education, which women have traditionally not had access to, and owning land and enforcing laws depends upon one’s “economic and physical access to legal machinery” as well as access to government officials. Due to the unequal gender rights to land ownership, South Asian women are less capable of providing income to the household which lessens their bargaining power in the household.

Inequality of social norms and perceptions of gender deservedness

Due to the traditional role of women in South Asia as caretakers in the household rather than workers bringing an income to the household, women are not socially perceived as deserving of more opportunities because worth correlates with wealth and not the quality or amount of work one has done.