We study the efficiency of premarital investments when parents care about their child’s marriage prospects, in a large frictionless marriage market with nontransferable utility. Stochastic returns to investment ensure that equilibrium is unique. We find that, generically, investments exceed the Pareto-efficient level, unless the sexes are symmetric in all respects. Girls will invest more than boys if their quality shocks are less variable than shocks for boys or if they are the abundant sex. The unique equilibrium in our continuum agent model is the limit of the equilibria of finite models, as the number of agents tends to infinity.

We report a continuous-time experiment studying the Burdett-Judd model, whose unique Nash equilibrium (NE) features dispersed prices. Adaptive dynamics predict that the NE is stable for one of our parameter sets and unstable for another. The empirical price distribution is close to the NE distribution for the stable parameter set, but for the unstable parameter set it skews toward higher prices in its NE support interval. We offer an empirical definition of price cycles in terms of changes over time in robust measures of central tendency and dispersion, by which the data exhibit persistent cycles in both treatments but larger cycles for the unstable parameters. Results are roughly similar for professional and student sellers and for limited-information treatments.