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Intra-household bargaining refers to negotiations that occur between members of a household in order to arrive at decisions regarding the household unit, like whether to spend or save, whether to study or work.
Bargaining In the social sciences, bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service debate the price or nature of a transaction. If the bargaining produces agreement on terms, the transaction takes plac ...
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 process within a family is one of the important aspects of
family economics Family economics applies economic concepts such as production, division of labor, distribution, and decision making to the family. It is used to explain outcomes unique to family—such as marriage, the decision to have children, fertility, po ...
. 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.


Household dynamics

The household is traditionally described as a single economic unit that "works as a group for its own good", meaning all members of the household contribute in an
altruistic Altruism is the principle and moral practice of concern for the welfare and/or happiness of other human beings or animals, resulting in a quality of life both material and spiritual. It is a traditional virtue in many cultures and a core as ...
manner towards the benefit and functioning of the entire household. The household is "the basic residential unit in which
economic production Production is the process of combining various inputs, both material (such as metal, wood, glass, or plastics) and immaterial (such as plans, or knowledge) in order to create output. Ideally this output will be a good or service which has value a ...
,
consumption Consumption may refer to: *Resource consumption *Tuberculosis, an infectious disease, historically * Consumption (ecology), receipt of energy by consuming other organisms * Consumption (economics), the purchasing of newly produced goods for curren ...
,
inheritance Inheritance is the practice of receiving private property, titles, debts, entitlements, privileges, rights, and obligations upon the death of an individual. The rules of inheritance differ among societies and have changed over time. Officiall ...
,
child rearing Parenting or child rearing promotes and supports the physical, emotional, social, spiritual and intellectual development of a child from infancy to adulthood. Parenting refers to the intricacies of raising a child and not exclusively for a bi ...
, and shelter are organized and carried out". Though it is not always synonymous with family, in the case of intra-household bargaining, in which members of the household are considered to be one unit, the household is generally synonymous. Because a household is composed of various individuals,
conflicts of interest A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates to situations in ...
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). In the non-cooperative model, each household member acts in order to maximize his or her own
utility As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosophe ...
; in the cooperative model, households act as a unit to "maximize the welfare of their members" (described above as altruism).


Bargaining power

Bargaining power Bargaining power is the relative ability of parties in an argumentative situation (such as bargaining, contract writing, or making an agreement) to exert influence over each other. If both parties are on an equal footing in a debate, then they w ...
is "the relative capacity of each of the parties to a negotiation or dispute to compel or secure agreements on its own terms". In other words, "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. More specifically, what determines the equality or
inequality of bargaining power Inequality of bargaining power in law, economics and social sciences refers to a situation where one party to a bargain, contract or agreement, has more and better alternatives than the other party. This results in one party having greater p ...
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.


Factors that determine fallback positions


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 systems (see also
social network A social network is a social structure made up of a set of social actors (such as individuals or organizations), sets of dyadic ties, and other social interactions between actors. The social network perspective provides a set of methods for an ...
s): Social support systems are friendship, familial, caste, 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 organizations (NGOs): State and NGO support could increase an individual's intra-household bargaining power by the creation of a social safety net. 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 low valuation of certain tasks, such as
care work Care work is a sub-category of work that includes all tasks that directly involve care processes done in service of others. It is often differentiated from other forms of work because it is considered to be intrinsically motivated. This perspectiv ...
, 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.


Individual assets

The access one has to individual assets, both economic (such as property, land, wealth, or earning ability) and personal (such as labor), determines fallback position because it is directly linked to one's capability of surviving outside the household. 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. In some societies, there is a custom of housewife hidden savings as a counter to inequality.


Social norms and gender perceptions

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.


Inequalities in 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 research in rural South Asian communities shows that their women have less access to strong bargaining power and their interests are not reflected in household decisions.


Game theory

Within the household unit and in the mathematical study of
game theory Game theory is the study of mathematical models of strategic interactions among rational agents. Myerson, Roger B. (1991). ''Game Theory: Analysis of Conflict,'' Harvard University Press, p.&nbs1 Chapter-preview links, ppvii–xi It has applic ...
, scholars have defined two distinct types of bargaining:
cooperative A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-contro ...
and non-cooperative. 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. 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.


See also

*
Capability approach The capability approach (also referred to as the capabilities approach) is a normative approach to human welfare that concentrates on the actual capability of persons to achieve lives they value rather than solely having a right or freedom to do ...
*
Care work Care work is a sub-category of work that includes all tasks that directly involve care processes done in service of others. It is often differentiated from other forms of work because it is considered to be intrinsically motivated. This perspectiv ...
* Conflict of interest * Cooperative game *
Feminist economics Feminist economics is the critical study of economics and economies, with a focus on gender-aware and inclusive economic inquiry and policy analysis. Feminist economic researchers include academics, activists, policy theorists, and practition ...
*
Feminization of poverty Feminization of poverty refers to a trend of increasing inequality in living standards between men and women due to the widening gender gap in poverty. This phenomenon largely links to how women and children are disproportionately represented wit ...
* Gender inequality *
Shared earning/shared parenting marriage Shared earning/shared parenting marriage, also known as peer marriage, is a type of marriage where partners at the outset agree to adhere to a model of shared responsibility for earning money, meeting the needs of children, doing household chores, ...
* Sibling rivalry *
Work–family balance in the United States Work–family balance in the United States refers to the specific issues that arise when men and women in the United States attempt to balance their occupational lives with their family lives. This differs from work–life balance in the United Stat ...


References

{{Reflist, 2 Family economics Feminist economics Bargaining theory