In Nash bargaining models,any change in circumstance that increases the wife's fall-back utility shifts the bargaining outcome in the favor of______________.Having a stronger fallback position this translates into _____________ bargaining power.

Question

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Any increase in the wife's fall-back utility (the minimum utility that she can receive outside of the marriage) gives her more bargaining power. This is because if the husband does not offer her a deal that is better than her fall-back option, she can always walk away and still be better off. Therefore, a stronger fall-back position means greater bargaining power for the wife. Thus, option A, "The wife; greater" is the correct answer.

In Nash Bargaining Models,any Change in Circumstance That Increases the Wife's