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[2] Intra-household allocation of resources can be examined using both cooperative and non-cooperative models. (a) Construct a simple model of intra-household allocation based on the
[2] Intra-household allocation of resources can be examined using both cooperative and non-cooperative models. (a) Construct a simple model of intra-household allocation based on the Nash bargaining solution. Select two assumptions of this model to discuss in detail and critically assess this model's relevance. (b) Using the model above, demonstrate how the equilibrium allocation of resources changes within the household when women are more empowered (i.e., their outside option increases)? Discuss the policy implications for cash transfer programmes directed towards women in developing countries. (c) Further, derive the Nash bargaining solution when the symmetry condition is violated and illustrate the equilibrium condition
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