RESOLVING CHILD CUSTODY DISPUTES EFFICIENTLY
(ESSEC BUSINESS SCHOOL)
DECEMBER 16, 2020
Abstract: We study arbitration mechanisms for child custody arrangements in the shadow of a default custody ruling that will be made by a court without any consideration of the parents' preferences. We show that the ideal default custody, providing the best chances for the efficiency of arbitration, is not an extreme custody regime which assigns full custody to one of the parents. Instead it is the custody arrangement that maximizes the reservation payoffs of the most difficult parent types to persuade to forfeit this default custody arrangement and accept arbitration. This result also generalizes to the multiple-parties cases where custody settlements that require the consent of more parties than the two parents. Further, when parents have quadratic disutility functions, efficient arbitration is possible only under the ideal default custody, regardless of the distributions of the parent types. This possibility result extends to the case where custody decisions that may involve more dimensions than the share of the time that the children will spend with each parent. It also extends to the multiple-parties setting. Finally, we identify a class of utility functions under which efficient arbitration is not possible even under the ideal default custody.