Saturday, 19 April 2008

Who needs Pop Psychology when you've got Pop Economics?

It looks like (mangled) concepts from economics and game theory are set to take over from pop psychology as the rushed journalists' choice to explain social phenomena. Besides the advantage that economics is more en vogue than psychology these days, sounding more logical and, um, hygienic (no messing around with sexual issues and being badly treated by your mom), it has the added advantage of allowing the journalist to link to incomprehensibly mathematical papers as reference, so it becomes difficult for readers to call their bluff. Take, for example, this article on Slate (linked to by both MR and SM), which tries to explain 'The Eligible Bachelor Paradox', using economics and game theory to 'explain the shortage of available, appealing men'.

You can think of this traditional concept of the search for marriage partners as a kind of an auction. In this auction, some women will be more confident of their prospects, others less so. In game-theory terms, you would call the first group "strong bidders" and the second "weak bidders." Your first thought might be that the "strong bidders"—women who (whether because of looks, social ability, or any other reason) are conventionally deemed more of a catch—would consistently win this kind of auction.

But this is not true. In fact, game theory predicts, and empirical studies of auctions bear out, that auctions will often be won by "weak" bidders, who know that they can be outbid and so bid more aggressively, while the "strong" bidders will hold out for a really great deal...

Where have all the most appealing men gone? Married young, most of them—and sometimes to women whose most salient characteristic was not their beauty, or passion, or intellect, but their decisiveness.
All of this sounds great, except that there's very little related to auction theory in there, especially if you were to go through the paper the author links to. In fact, while the paper does talk of the weak bidders bidding aggressively, that's in the context of bid shaving - bidding less than their total holdings. In effect they're driving a tougher deal with the seller, not settling quickly. Overall, it's a lot of faff dressed up as game theory - after all, just because some women are 'easy', doesn't mean men have to get married to them. Indeed, there's absolutely no discussion of the men's preferences. But I guess it's written to appeal to single, lonely women who read Slate and have a higher opinion of their intelligence, to make them feel better about not finding an eligible bachelor yet. The women who've found guys are all probably too busy to read Slate - the hussies.
But I come to join the ranks of pop economists, not to bury them. So here's my take on the same problem, using good old-fashioned Consumer demand theory and indifference curves.
To begin with, let's start with a utility function describing the preferences of a man over Intelligence and Beauty:

i.e. the individual gets utility from (his partner's) intelligence and beauty, and aims to find a partner with the optimal combination of both (assuming convex preferences). The indifference curves would be as given at right.

For this particular model , let's consider the individual's endowment to be in terms of time, which constrains his ability to choose. The budget constraint can be written as
M=P1I + P2B
Where M is the time available, P1 is the 'price' of intelligence - interpreted as the time spent to search/identify intelligence. Similarly P2 can be considered the 'price' of beauty (given that it's easier to identify beauty, P2 would be less than P1, with the slope of the budget constraint, (-)P1/P2 >1). The budget constraint for one endowment is shown in the diagram as M1, with the individual choosing the combination (that is, partner) A.
Now consider that it's becoming easier for women to look pretty these days - better make-up, shampoos, hair irons and what-have-you, which means that the 'supply' of beauty has gone up, which in turn means the price has gone down-with more pretty women around, the individual has to spend less time to find them. This change in price will affect the final outcome, which can be split into the substitution and income effects.
The (Hicks) substitution effect is the effect of the individual changing his choice, given the new prices, if he had to stay on the same indifference curve - i.e. get the same level of utility, for which he would in fact require only an endowment M1'. This would see him shift from combination A to combination A', opting for a greater level of beauty and substituting away from intelligence.
The change in prices also implies an increase in purchasing power, which is captured by the income effect. The individual's new budget constraint is M2, putting him on a higher indifference curve (i.e. getting a higher level of utility), and his final choice will be the combination B, with greater beauty and less intelligence. (if we considered beauty to be an inferior good, we might have expected the income effect to counter-act the substitution effect to some extent, but, hey, that's not realistic now is it?).
In a nut-shell, that means that as it becomes easier for women to look pretty, men would readily substitute away from intelligence and opt for a partner with greater beauty. And we didn't even need auction theory to explain that.
But we might as well ask what this means for the intelligent, single women who read Slate magazine. One option is to go out there and get themselves noticed - that would reduce the 'price' of finding them, which should cause the price effect discussed above to work in their favour. The other option is to pretty themselves up - that moves them up to a higher indifference curve, and thus more desirable. Of course, both options are not mutually exclusive.
So there you have it, all you intelligent, single women, your prescription for relationship success: look good and get out there.
Hooray for Pop Economics!


  1. You expect women to comment on this?


  2. doesn't love come in somewhere to skew the indifference curves? i mean you could find someone v pretty n v intelligent and yet just prefer someone else coz u love her???
    quite a lot of hard work went into that angle throwing which proves a lil of your desperation to get a girl now?

  3. Oh well done, JC.

    Anon, I don't think love would change things much. If you do (for instance) love a cow, your perception of her beauty (and/or intelligence) is upped significantly - beauty, after all, really is in the eyes of the beholder.
    The angle curves drawn would, therefore, still hold IMO.

  4. Oh please - who needs women when you've got the IPL on?

    The post was meant as a parody of how journalists use half-assed interpretations of economics and game theory to say whatever they like. You could level the same accusation at the original article that claims to use auction theory.

    Having said that, what if you've fallen in love with someone because they have the right mix of beauty and intelligence and they're willing to go out with you (think Gunther from 'Ugly Betty')? Maybe you just pick from what's available.Tim Harford discussed this in his book 'The Logic of Life', excerpted here, with an experiment based on speed dating. So maybe as an intelligent woman, the best thing to do would be to get yourself out there, after all. A few more excerpts from the book, dealing with mate selection and divorce, are available here and here.
    For further reference on how the indifference curves for men might be formed, you could read 'Gender Differences in Mate Selection:
    Evidence from a Speed Dating Experiment'
    (summary from Slate here), based on a different experiment (I've linked to this before, in my very first post), which posits that men value beauty more than intelligence.
    For an alternative view on beauty, listen to Dr.Hook singing 'When You're in Love with a Beautiful Woman'. If you consider that perspective, there would be a change in the way the indifference curves are formed, with perhaps beauty becoming an inferior good, and the ready supply of beauty causing the individual to opt for a higher level of intelligence while simultaneously getting a slightly higher level of beauty as well.

  5. All my worst fears about economics are being confirmed. Hee hee.

    There is an implicit notion of rationality here that seems to be pushing it when it comes to love.

    How's the IPL? I hear there were lots of shots of SRK.

  6. Economics isn't so bad. It can get a little icky, especially if not applied well, which is what the point of this post was.
    The assumption of rationality is implicit through most of classical economics, and I think it works fairly well. Though this is an overly simplistic model anyway.
    If you think rationality is over-rated you could consider Dan Ariely's blog at 'Predictably Irrational", or look up Behavioural Economics. If that's not enough, you can check out Post-Autistic Economics, (which has to be the most insensitively-named off-shoot of a mainstream subject ever) though that deteriorates into the rantings of a bunch of bitter French academics after a while...

  7. Bitter french academics ha ha

    what i found interesting was your point that economics is more vogue these days than psychology.

  8. You guys should check out the documentary "The Century of the Self" -- it's on google video.

  9. As a scientist, my problem with economics is that I rarely hear of any verifiable or falsifiable predictions. It seems as though only the investment bankers are able to make predictions.

    Economics can sometimes seem to an outsider like an elaborate means of justification for non-obvious policy decisions.

  10. Was, naming you JC (well your initials anyway), a way of ensuring your propinquity to Jesus Christ?

  11. @y:
    every economist who has a shred of self respect will ensure his/her results are verifiable, and repeatedly so.

    most of the economics one gets to hear is of the kind highlighted in the post.

    i'm not surprised by your comment, economics (or rather mainstream economics) is a very inward looking profession - for the most part - although it is beginning to reach outwards.

  12. @anon: is your usage for the word 'propinquity' meant to signify that you've been word-listing? JC just happen to be my initials. Well, actually, my initials are JLC, but I hardly ever use my middle name, and I wouldn't want to evoke comparisons with TLC.
    @y/k: on the greater role of economics -I think there's been a lot of gimmickry in the way economics has been presented to the larger public, especially since Freakonomics came out. My personal view of economics is as a very useful way of thinking, not necessarily as a pure science. It will require a lot more time and development in forecasting techniques for economists to be able to make clear predictions without caveats - there are just too many variables, not to mention that we are talking about the study of human behaviour, with all its vagaries and interactions with politics and rare events.
    Consider trying to identify a Higgs-boson in the middle of a crowded room rather than the LHC, with the added complication that the boson may be having a bad day and just doesn't want to be well-behaved and show itself to you, or it goes against its political views to do what you think it should or whatever.
    The funny part is that we expect economics to be both rigourous and mathematical, yet outward-looking and immediately practicable, while we don't necessarily impose such restrictions on, say, physics. For example, if I were to argue that isntead of putting 8 billion dollars into the LHC, that money could be put into subsidizing the growth of technology in Formula 1, since derivatives of that technology would be more immediately applicable to everyday life, I'm sure most people would disagree.
    Anyway, I'm typing this all out in office, so my thoughts are probably a little mixed up right now. Kindly adjust.

  13. Hahahahahaha!
    You really do take yourself very seriously don't you? Hahahaha.
    It's almost endearing.

  14. We must take ourselves seriously. At least once in a while.

    Anon is a girl right? Hehe.

    Actually, I have a lot of respect of economics (and sociology as well). I think of it as the large-scale equivalent of neuroscience -- millions of variables, control experiments are hard/unethical, and real predictions are hard to come by.

  15. @anon - I don't normally take my self too seriously,usually, but I did have to wear a tie to work today, so maybe that might explain it.
    Incidentally, are you the same commenter, or are you a new one?

  16. wow this anonymous stuff is crazy

  17. why don't jc and y just write daily mails to each other? long ones

  18. What? And deprive ourselves of your insightful commentary?
    Please ignore K's comments. You are welcome to weigh in with all the comments you want.
    To paraphrase Bogey - Of all the comment threads, in all the blogs, in all the world, she types into mine.
    I must be doing something right. 8-)

  19. JC, you coming to Boston, right?

    This anon is jealous of serious debate! Hehe.

    If you were on wordpress, you'd have at least an IP address, which would give you a clue as to where the commenter is commenting from.

    But the mystery can be fun I suppose. I'm assuming it's someone you know.

  20. shows how economics is in vogue. people assume so easily.

  21. Erm, being presumptuous does not necessarily have anything to do with economics. So which of the following assumptions are incorrect:
    a)anon is just one person;
    b)anon is a woman (or girl);
    c)anon is someone I (JC) know; and/or
    d)anon is jealous of the level of debate?

  22. I am, therefore I am.