Always thought about prenups like this. To be fair, they kind of work like some sort of zero sum insurance. A prenup might give you insurance at the cost of your partner not having it. So I wouldn’t necessarily say “you should get insurance.” Instead it would be “bargain for the best deal.”
I would argue they are positive sum -- your expected value of the division of profits must add up to zero whether you divide them before or after you divorce, but being able to negotiate it more cheaply makes both parties better off.
Yea your right, guess I just restricted myself to a scenario where one person does not want to get a prenup for potential gain. I think I confused myself thinking about how prenup bargaining would work under different risk preferences.
Leeson, P. T., & Pierson, J. (2016). Prenups. Journal of Legal Studies, 45(June).
Neato
Always thought about prenups like this. To be fair, they kind of work like some sort of zero sum insurance. A prenup might give you insurance at the cost of your partner not having it. So I wouldn’t necessarily say “you should get insurance.” Instead it would be “bargain for the best deal.”
I would argue they are positive sum -- your expected value of the division of profits must add up to zero whether you divide them before or after you divorce, but being able to negotiate it more cheaply makes both parties better off.
Yea your right, guess I just restricted myself to a scenario where one person does not want to get a prenup for potential gain. I think I confused myself thinking about how prenup bargaining would work under different risk preferences.