ABSTRACT
Household decisions concerning consumption, labor force participation or fertility are the topics of the “new home economics.” Usually, the household is considered to be a decision unit, and models are used that are based on the maximization of a household utility function. This approach ignores the internal structure of families and assumes an intra-family consent. This is a very restrictive assumption. Increasing divorce rates show the importance of conflicts in the family. Both the formation of partnerships and their separation are based on individual decisions of the participants. Since family decisions always contain the possibility of conflict, we must assume that in an existing family the decisions are also based on individual interests and reflect the results of internal negotiations. For this reason game theoretic bargaining models may be an appropriate analytical approach.
