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Zelder paradox
In economics, the Zelder paradox is the observation of Martin Zelder that welfare-reducing divorce is more likely when a couple has invested their efforts into love and children instead of money, possessions, and sex. Divorce is considered to be welfare-reducing when one spouse's desire to remain married is greater than the other spouse's desire to obtain a divorce. In this situation, a divorce will decrease the combined well-being of the couple, and so could be considered destructive of overall welfare.〔Zelder, Martin (2008) “The Intrinsic Social Cost of Public Goods: Revising (Downward) the Optimal Size of Government,” Research Symposium on Bad Public Goods, Northwestern University, http://www.law.northwestern.edu/searlecenter/papers/Zelder_Social_Cost.pdf.〕
==Bargaining in marriage==
If one spouse values a marriage more than the other spouse values a divorce, then (as suggested by the Coase Theorem) it would be expected that the spouse who wants to stay married would offer the other a greater share of whatever marital goods exist. This offer would be large enough to ensure that both spouses prefer marriage to divorce. In order to be applicable, however, the Coase Theorem requires frictionless trading between parties. In marriage, some goods are difficult to trade.〔Zelder, Martin (1993) "Inefficient Dissolutions as a Consequence of Public Goods: The Case of No-Fault Divorce," Journal of Legal Studies, vol. XXII, 503–520.〕 An example is so called marital public goods, which are produced within a marriage and benefit both members of the couple, but also have the characteristic that one spouse cannot exclude the other from enjoying it. If one spouse cannot exclude the other from enjoying a good, then that spouse cannot threaten to withhold or increase production of it, and so the good cannot be used in marital bargaining. If a significant portion of marital wealth is in the form of public goods, then bargaining may not be able to save a marriage, even though a divorce would cause greater overall unhappiness than remaining married. Zelder cites Gary Becker as one of the originators of the idea of using economic tools to analyze bargaining in marriage and the potential for marital public goods to cause inefficiency〔Becker, Gary (1981) A Treatise on the Family, Harvard University Press.〕〔Becker, Gary (1973) A Theory of Marriage: Part I, Journal of Political Economy 81, p. 831-846.〕〔Becker, Gary (1974) A Theory of Marriage: Part II, Journal of Political Economy 82, p. S11-S26.〕
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