There are 1.3 million single men in New York, 1.8 million single women, and of these more than 3 million people, about twelve think they’re having enough sex.
~CARRIE BRADSHAW, Sex and the City: The Movie
The argument of The Logic of Life: The Rational Economics of an Irrational World is that rational behavior is much more widespread than you would expect and crops up in the most unexpected places and that the economists’ faith in rationality produces real insight.
Competition, supply, and demand in the marriage market. Does competition really apply to love?
Husbands and wives love each other (we hope) and enjoy each other’s company; they are a romantic couple. But they are also an economic unit, dividing labor and sharing the costs of bringing up children or putting a roof over everyone’s head.
Now, do people spend their lives looking for ‘the one,’ the one person–or less ambitiously, a particular type of person–who is the perfect match for them temperamentally, socially, professionally, financially, and sexually? Or do people adjust their standards depending on what they can get? In other words, are the romantics right, or the cynics?
There is some suggestive evidence from the study of speed dating, coutesy of the economists Michèle Belot and Marco Francesconi.
It won’t surprise many people to hear that while men proposed a match with about one in ten of the men they met, men were a bit less choosy and proposed a match with twice as many women, with about half the success rate. Nor will it shock anyone to hear that tall men, slim women, nonsmokers, and professionals received more offers.
They didn’t seem to look for ‘the one’ at all
Men prefer women who are not overweight. Now, when twice as many overweight women turn up, twice as many overweight women receive offers of a date.
More women prefer tall men than short men, but on evenings when nobody is over six feet, the short guys have a lot more luck.
If people are really looking for a partner of a particular type, we would expect them to respond to the absence of such people by getting the bus home with a disappointed shrug, resigning themselves to spending Saturday night in front of the television, and hoping for a better turnout at the next speed date. But that simply isn’t what happens. Instead, people respond to slim pickings by lowering their standards.
While love is blind, lovers are not
They are well aware of what opportunities into account when they are dating. They also make big, rational decisions to improve their prospects or to cope when prospects look grim.
The Marriage supermarket, somewhere in economic space
It takes two to tango, and it also takes two to get married. Marriage therefore requires that you go out and find someone you want to marry and persuade them to marry you. It’s a matching problem.
The marriage supermarket is a very simple model of marriage: Twenty single guys and twenty single men in a room. Shopping is easy. Any man and woman who present themselves at the checkout can collect a hundred dollars (50/50) (a simple way to represent the psychological or financial gains from getting married) and leave.
The most people would rather be married than remain single and that your gains from getting married than remain single depend on the supply of marriage partners. Of course, we know that in reality there are contented lifelong singletons and married people who curse the day they walked down the aisle.
Imagine an unusual evening in the Supermarket, when twenty single women show up but only nineteen single men. What happened to the other guy?
He is gay. Or dead. Or in prison. Or moved to Sillicon Valley. Or is studying economics. For whatever reason, he is not available.
You might think that the slight scarcity of men would cause the women some modest incovenience, but in fact even this tiny imbalance ends up very bad news for the women and very good news for the remaining men. Scarcity is power, and more power than you might have thought.
One woman is going to go home with neither a spouse nor a check from the cashier. That’s bad news for her. What is less immediately obvious is that the women who do get a spouse are also going to be worse off–and their loss is the men’s gain.
The odd woman out, contemplating going home empty-handed, will make the obviously rational decision to muscle in on an existing pairing. The unwanted woman could certainly offer a better deal than a fifty-fifty split, perhaps agreeing to accept only forty dollars.
The bids will fall until the woman who faces leaving alone is offering to walk through the checkout with some lucky guy and accept just one cent as the price of doing so. He’ll get $99.99; her one-cent profit is better than nothing.
The trouble doesn’t end here.
The Law of one price
No matter what deals are agreed, there will always be one girl left over, offering to pair up for just one cent.
The law of one price says one cent is what all of them will get: Anyone on the verge of getting a better offer will be undercut. The nineteen men will each get $99.99. Nineteen women will get a cent each, and the last woman will get nothing at all.
A shortage of just one man gives all the other men massive scarcity power.