'Arranged' marriage, education, and dowry: A Contract-theoretic perspective

Abstract

This paper propounds a contract-theoretic model where dowry acts as a screening device to differentiate grooms of varying qualities. In 'arranged' marriage settings that are characterized by incomplete information in the sense that the true quality of the groom remains unobservable to the bride, and in the presence of observable traits like education that are easier for the better quality groom to achieve, education-dowry contracts can potentially serve as a screening instrument. Moreover, increasing dowry levels can be explained through increased educational attainments brought about by modernization and government policies. The paper also discusses historical and narrative evidences in support of its main hypotheses.