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Essay / Game Theory in Marriage - 1545
Game Theory in Marriage1 OverviewEach year, more than two million couples marry in the United States, but nearly half of these marriages end in divorce1. Given the high divorce rate, one would assume that the use of prenuptial agreements (also referred to herein as prenuptial agreements) would be equally important. However, only 5 to 10 percent of married couples typically sign prenuptial agreements, while staying ahead in what Samuel Johnson called a "triumph of hope over experience." This article attempts to explain the paradox, to understand the behavior of individuals regarding marriage, divorce and recourse to prenuptial agreements. We used principles of game theory to predict an equilibrium outcome related to the use of prenuptial agreements and to explain deviations from this outcome.2 Background to Prenuptial AgreementsA prenuptial agreement, also called a prenuptial agreement or "Prenuptial agreement", is a legal contract entered into by both parties before marriage that sets expectations for behavior during the marriage and sets guidelines for the division of property in the event of the dissolution of the marriage. Legally speaking, a Marriage is a private contract between two people who voluntarily agree to enter into a marital relationship. 2 Couples who marry are united in many areas, notably social and financial. Financially, the concept of community property links the property and debts of each other. one spouse to those of the other..