Behavioral Economics: Valentines Day Edition
It’s that time of the year again. Love is in the air, birds are chirping. Naturally, you are looking for topical behavioral economics material. Here are a few articles and videos to guide you through Valentines Day, whether you are single and searching, or taken and unsure.
Dan Ariely: On Dating and Relationships
When hiring, companies are willing to pay external CEOs much more, yet they perform worse than CEOs that are promoted internally. We tend to overestimate how glorious other people are, at the expense of the people whose wrinkles we are familiar with. This wonderfully illustrated video features Dan speaking about how this phenomenon impacts the world of dating.
“When we’re in a relationship but continuously with one foot out, and continuously thinking about how the outside world is more tempting and more interesting and so on, it’s actually not a good recipe for investing in a relationship. It’s not a zero-sum game, it gets better when you invest in it. And when you don’t think you are there for a long time, the likelihood of investment is just not that high.”
This piece examines bargaining theory and how it relates to the divorce rate of roughly 4,000 couples over a six year period. Although the couples who misjudged how happy their partner was in the relationship had a higher divorce rate, bargaining theory predicted it should have been significantly higher, given the percentage of couples that fell into this category (roughly 60% of them!) The researchers found that caring, or gaining happiness from your spouse being happy, accounted for the results.
“The idea of love here is that you get some happiness from your spouse simply being happy,” Friedberg says. “For instance, I might agree to do more house chores, which reduces my personal happiness somewhat, but I get some offsetting happiness simply knowing that my partner benefits.”
Why Online Dating is So Unsatisfying
Online dating have you down? You aren’t alone, in this video Dan highlights some of the things online dating gets wrong, and how the experience could be improved. Remember, humans are like wine, not digital cameras! (and ogres are like onions!)
“Online dating sites assume that people are easily described on searchable attributes, they think that we are like digital cameras, that you can describe somebody by their height, and weight, and political affiliation and so on, but it turns out that people are much more like wine. That when you taste the wine, you could describe it, but it’s not a very useful description, but you know if you like it or don’t. It’s the complexity and the completeness of the experience that tells you if you like a person or not.”
Finally, this blog post features a few behavioral economics related poems collected from Twitter. What better way to sweep your Valentine off their feet?
“Discounting the future”
I proclaim my affection
Early, not late
Because my love
Has a high discount rate