When
one economist couldn't get a girlfriend, he had an idea: restrict his
supply, find a gap in the market and establish a monopoly. But would it
pay off?
'I know this sounds like a cliché, but really, it's not you…" I
stopped listening at this point. I knew what was coming. In my mind I
had already dumped myself several times before Lizzie finally got round
to doing it. She was clever, talented, beautiful; and I had lost her in
a personal best time of six weeks.
"Perhaps you were too nice," a friend, Flora, suggested a couple of days later.
"Don't be ridiculous."
"You've got to play the game – play hard to get."
And then it clicked. "You mean, like, restrict my supply?"
She
rolled her eyes, a reaction I was used to getting whenever I translated
something, quite unnecessarily, into economic language. "I guess you
could put it like that."
A few days passed. The initial shock
began to wear off. Perhaps we weren't right for each other after all.
Anyhow, I shouldn't really have expected it to end any other way. I had
gone on plenty of dates but no relationship had lasted. Whenever I did
find a girl I liked, I let my emotions build up too much steam, and she
would run.
Yet, as an economist, I had always prided myself on my
ability to think rationally and get myself out of even the most complex
of problems. And now, thinking about it, the idea that I had
oversupplied myself seemed to make a lot of sense. I started thinking
about what else I might be able to learn from applying the principles of
economics to my love life – or lack of it.
The theory that people have a market value, rather than an intrinsic or absolute value, has been around for centuries. Thomas Hobbes,
the 17th-century political philosopher, believed we are essentially
worthless, and are valuable only to the extent that others think we are.
In short, we are prey to the opinions and demands of the market. One
day the market might want blondes, the next brunettes, and those blondes
and brunettes will see their price vary accordingly.
Online
dating is perhaps the most clearcut example of market principles in the
world of romance, but there is evidence everywhere. It is common to
speak of ourselves as being "back on the market" when we've ended a
relationship, or "damaged goods" after a traumatic break-up.
Likewise,
we are all familiar with the idea of playing hard to get – although
this particular concept, as I soon learned, is rather more complicated
than it first seems. Usually when we try to sell something, and don't
find any takers after some time, our natural response is to cut the
price, and continue to do so until we find a willing buyer. Playing hard
to get, however, results in an increase in price, not a decrease.
Most
goods fall into one of two categories: essential goods, or luxury
goods. We generally prefer essential goods, such as staple foods, drinks
and household items, to be as cheap as possible. This is not the case,
however, for luxury items, such as jewellery and fast cars, whose
relative value derives not only from their quality, but also from their
exclusivity. For instance, people buy Rolex watches not necessarily
because they tell the time better than, say, a Timex, but because they
are beyond the reach of most people. To maintain this status-symbol
quality, Rolex makes very few watches, and charges a lot for them. If
Rolex increased the number it produced, the price of the watches would
fall.
When it comes to marketing ourselves, it looks as if playing
hard to get is, in part, as for Rolex watches, an effort to maintain
our status as luxury goods. We want to brand ourselves as someone that
only the very best could be with. For one's affections to come too
easily makes the recipient feel that just about anyone else could have,
or already has, been in their shoes.
However, as I discovered,
playing hard to get in the initial stages of courtship – when you are
trying to meet someone in a bar or at a party – doesn't really work.
There's so much competition that any attempt to increase your price may
actually make you
less attractive. When I first tried testing
this theory, I approached a girl in a club, only to leave her
mid-conversation to return to my friends. I thought I had played it
perfectly, but I found her later chatting up someone else. Clearly, if
other guys are offering similar goods in terms of their looks and small
talk, but are not playing hard to get, they are offering a better deal.
I
realised that you can only play hard to get once the woman actually
knows and likes you. This is because by then you have differentiated
yourself from the other men on the market, so you gain more control over
your market price. As you come to be seen as an individual with unique
characteristics, rather than one of many men trying to get some
attention in a club, the market structure changes from one of many
competitors selling homogeneous goods to one of a handful of
competitors. Playing hard to get is suited only to at least the second
or third date, because only then is demand sufficiently inelastic for a
woman to tolerate, or even be attracted by, a rise in price.
A few months after Lizzie dumped me, I met Sarah: nice, fun, pretty. I
mustered the courage to ask her out for a drink. The date went well.
I sent her a message afterwards saying that I'd had a good time and
would like to meet up again.
"Yeah, sure, sounds good," she
replied. I could already tell she was playing this one cool. I learned
from our mutual friends that she had no intention of getting into a
relationship. OK, I thought, I know this game. Be cool, too, establish a
monopoly, restrict your supply.
I liked Sarah. I found her
attractive, and there was definitely some long-term potential. How was I
supposed to communicate this to her without actually saying it?
Economically
speaking, a signal is a visible cost incurred by an individual that
reveals information about their preferences or what type of person they
are. As most men are willing to part with their cash to impress a woman,
spending money in itself is no way to reveal that you really like
someone. Instead, a carefully considered choice of restaurant, perhaps
one that shows some kind of link to something you discussed at your last
meeting, is much more effective as a signal of genuine interest.
Similarly, choosing a lunch date rather than a dinner date says, "I have
no intention of trying it on with you, this time."
That said,
evidence of too much planning can be an oversupply. Or, to put it
another way, it can be just plain creepy. So you need a costly signal
that can convey information about your preferences, without diminishing
your market value. I got to work thinking about how I would follow up my
first date keeping this trade‑off in mind.
It would be a lunch
date in the park. We'd pick up a sandwich from a local deli and laze
around on the grass, chatting. The plan was meant to signal I was happy
to put the brakes on, as well as show I was interested in more.
The
second date went well and, against all the odds, Sarah and I broke
through the six-week barrier. Sarah seemed to like me for the complete
package, for all my various imperfections as well as my good parts. Our
relationship made my life better in practically all areas.
But as
the months passed, Sarah's tolerance of my misdemeanours seemed to
diminish. Soon I found that none of my various shortcomings – my
messiness, my lateness – was going unnoticed. Life was becoming a bit of
a drag, and I got to thinking about what else might be on offer.
Being
with Sarah cost me time, money and emotional investment. It also cost
me the things that I couldn't have because I was with her, such as
nights out with my friends and the chance to meet other women. Those
missed things are what are known, in economic terms, as opportunity costs.
With these, we have to look at our spending decisions relative to what
else is available to make sure we're getting the best deal for
ourselves.
Now I just needed to apply this thinking to my
predicament with Sarah. If I were to take Sarah in complete isolation, I
would say I was happy. We were a great team, we had put a lot into the
relationship and, though the returns on my investment were diminishing,
we might still be able to get a lot more out of it. But when I looked at
what I was missing out on, I wasn't so sure.
"I kind of feel that
I've been growing apart from my friends recently," I said to Sarah. "Do
you really want to look back on your 20s and regret all those things
you didn't do?"
"So you're saying that you're going to regret being with me?"
"No! Don't be silly… I think we've had a great time so far."
"Yes, we have," she agreed. "I know things have been a bit rocky recently, but we've put so much into this…"
The
words "We've put so much into this" struck a chord. Sarah, I realised,
was making the same mistake I had made one night when I spent four whole
hours queueing to get into a club. Each time I thought about leaving to
find another club, or go home, I thought, "Well, I've already waited
half an hour, so it would be a waste of my time if I left now." If I'd
thought more like an economist, I'd have known to disregard the time
I had already spent queueing. That time had been and gone; it was a sunk cost. What I should have asked was, "What do I want to be doing right now?"
In
the same way, my attachment to the time that Sarah and I had already
spent together, and the bond that had formed between us as a result,
shouldn't cloud the fact that what I was missing could make me happier. I
needed to stop asking, "Given that I am in a relationship with Sarah,
what reason do I have to break up with her?" and ask instead, "Given
that I am in a relationship and could be in another relationship, or
none at all, what reason do I have to stay with her?"
Two nice,
compromising people could stay together indefinitely if they continued
to ask the former question rather than the latter. They would trundle
along together, amicably, for their whole lives. And yet they could
still be missing something, and be completely oblivious to it. I wasn't
going to be one of those people. I was only in my 20s. The time for me
to say "You'll do" was still a long way off. It was time to liquidate my
investment and buy back into the market.
When I started dating
again, I soon realised something in me had changed. Perhaps Hobbes
wasn't the best model to go by after all. I'd become so concerned that I
wouldn't get back from a relationship at least as much as I put in that
I put in a little, and ended up getting nothing back. Being completely
self-interested, I realised, was not just morally dubious but
economically inefficient.
And so I started to think like a Keynesian.
Keynesians don't believe that balancing a budget is the immediate
solution to economic malaise. Keynesian governments try to restore the
thing that badly performing economies are generally lacking: confidence.
They do this by borrowing money and spending it on public projects,
which create jobs, which in turn increases consumption, which creates
more jobs. This upwards spiral of investment, production and consumption
is known as the Keynesian Multiplier. If the multiplier works, the
government can actually get back more from the taxpayer than it
originally spent, as the rest of the economy increases production and
with it the tax it pays.
When I met Rosie, I changed my strategy.
We reached the familiar third-date impasse, and I could tell Rosie was
on the defensive. But instead of playing along, settling into my
defensive mode and waiting for her to budge, I decided to be open. I
said, in as many words, "I like you. I want to spend more time with
you."
Over the ensuing weeks I gave, in many ways, more than I
could ever, rationally, have expected to get back from her. Getting back
as much as I put in wasn't really the point. I just wanted to make her
happy. And the more I gave, the more Rosie showed to me the person she
really was. We fell for each other. I was no longer happy just because I
liked the idea of making her happy, but because I was getting to know
the real Rosie. The multiplier effect had kicked in: knowing that I was
in some way responsible for the flowering of the person in front of me
made me want to give her even more, and she, in turn, gave more back. We
became more than the sum of our parts.
Keynesian economics and
love, it turns out, have rather a lot in common: they both work not by
balancing budgets, or reducing supply to increase prices, but by
inspiring trust. Economics did, in the end, provide me with an answer –
just not the one I expected.
credits: the guardian
