Why Don’t You Leave? A Household Bargaining Model with a Household Preference of Addiction

Abstract

This paper introduces a household model of addiction that focuses on how a breakdown point, derived from non-cooperative and collective model outcomes, diverges with variations in the spousal preference for household addiction (PHA). The model reveals that in households with different PHAs between the husband and wife, the spouse with the negative PHA will garner higher utility from the collective outcome. When a spouse has a negative PHA, an increase in their relative decision power will decrease the consumption of the addictive good for the other partner. The model highlights a few reasons why people stay in addiction-affected households.