Antony W Dnes Autonomy the Law Commissions Proposals

Antony W. Dnes Autonomy & the Law Commission’s Proposals

Marriage & Cohabitation: Insights from Economics of Law • Cohabitation and Marriage - Joint Investment of Human and Other Capital) with Expected Surplus. • Life Profile Theory of Marriage (Cohen, 2002) - c. f. Burns • Marriage as Standard Form Contract, Insurance, Signal. . . • Emotional Theory Fails to Predict, e. g. Differences Between Groups, Impact of No-Fault Laws. . . • Laws, Regulation, Institutions - Internalize Externalities • All about Incentive Structures, Opportunism, Exploitation.

Law Commission & Marriage Lite: Chipping Away Choice? • Divide Retained Benefits & Continuing ‘Disadvantages’ (Sunk Costs = Reliance) on Separation. • Old Contract, Trusts: Poor Recognition of Human Capital. • But ‘Volunteers’ Issue – Chip Away at Choice, Autonomy? • Regulation Need not Undermine Autonomy: (i) Enforcing Discernable Promises; (ii) Response to Changed Constraints. • A New Contract View? FC to Complete Expectancy by Compensating Sunk Cost Linked to Outstanding Retained Benefit, & Divides Remaining Benefit • c. f. Hydraulic Engineering (QBD, 1878) – Expectancy Includes Reliance.

Constrained Choice & Marriage Guarantee (Akerlof, 1996) • Women Face High Expected Costs of Unwed Pregnancy (P). • % (α) Demand Marriage Guarantee (P+d>P) for Intimacy. • Sufficiently High α Implies Most Women Require Guarantee • HPUs (Happy to be Pregnant & Unmarried) Still Benefit from & Require Guarantee • So Many Women Require & Men Give Guarantee (Male Benefits Lower but Still > 0). • 1950 s World of Marriage, ‘Engagement Intimacy, ’ Stigma. • Series of Choices, but Constrained.

Technical Change & Cohabitation (Akerlof, 1996) • Contraception – Probability of Unwed Pregnancy Falls • Expected Costs (P)↓ - Guarantee Group (α) Smaller. • Women Fail to Obtain Guarantee, even if most Prefer it. • Consider HPUs - would Benefit from Marriage, but α is Smaller - no Longer Insist (Competition from (1 - α) Group). • Post-1960 s Cohabitation - Driven by Technical Change & Competition among Women - Constrained Choices. • Common-Law Marriage Myth Possibly a Self-serving Rationalization for Both Sexes? Sense of Drift.

Non-Rent-Seeking Arguments for Regulatory Intervention: a Matter of Life & Profile • Constraints Leave Women Open to Immiseration. • Cohabitation - no Life-profile Linked Support Obligations. • Restricting Non-obligated Cohabitation ‘Ties Hands’ & Stops Damaging Competition between Women. • c. f. State Coercion Over Public Goods: or Everyone Understates Preferences for Police, Military. . . • All Sorts of Limits on Freedom of Contract (Trebilcock 1994): Child Labour, Corruption, Perpetuities, Easements …

Non-Rent-Seeking Arguments: Negative Technical Externality • Not Pecuniary Externality (one gains, one loses). • e. g. Instability of Cohabitation Removes Fathers from Home, Resulting in Child Delinquency – a Technical Externality. • Stabilizing Cohabitation Reduces Antisocial Behaviour. • Real Effects

Non-Rent-Seeking Arguments Completing Expectancy • Cohabitation Intended to Share Long-term ‘Surplus’ to Household and Market Inputs • Returns to One Party not Protected → he/she Under Invests. • e. g. Increases Paid Work, as ‘Insurance, ’ not as Better Use of Time for Family. • e. g. Child Delayed Owing to Family Insecurity. • In Extreme, Some Parties Avoid ‘Efficient’ Cohabitation. • Efficient to Secure Returns against Sunk Costs – More Happy People, Better Efforts.

Opt Out? • Opt In/Out Same if Law Known & Bargaining Cost Low. • Adjust Relationship Elsewhere if FC Adjudication Expected to Disturb - Includes No/Low Obligation Cohab (Coase). • Undesirable Chilling Effect if Law Creates Uncertainty, or Inhibits or Deflects Bargaining. • e. g. A Bargains Over Domestic & Market Roles, Savings, Consumption & Property - Court Expected to Favour A Chills B as A’s Risks Were Already in ‘Upfront Points. ’ • Enforcing Promise Warms A – Chills Exploiting B Only.

Obligated Cohabitation: Effects on Marriage, Cohab … Single Cohabitation Married Dividing Lines May Move - Welfare Change Uncertain ? Married Single Cohab All OK if Gains>Losses • Marriage Incentives Unchanged? • Some Bs Deterred from Cohab? • Some As Happier About Cohab - But 2 to Tango

An Economist Writes … • Need Welfare Focus or Run into Problems (e. g. Menages). • Under Property Rule, Small-Numbers Bargaining Works - Need Clear Case, Beyond ‘Give More to A, ’ for Change to Liability. • Obligations ↑ → Clear Disincentive to Cohabit c. f. Separation. • Implication for Marriages: Benefits for Some B’s ↑ if Cohab Accepted; Benefits for Matching A’s > 0; Competition from Other A’s Accepting Cohab → Some B’s Offer Cohab, not Marriage (c. f. LC 179, p. 104) (c. f. Akerlof 1996). • Above e. g. - Welfare Enhancing, but Marriage Undermining. • Inescapable: World Move to ‘Lite’ - ‘Heavy’ not a Fit? • Unintended Promotion of Separation?