What comes to mind when you hear the word “economist”? Someone who comes across as dry? Telling you things that are incredibly complex? Someone who can explain what caused a financial crisis? Someone who is boring? Too rational?
On the long list of things that might come to mind, love is probably one of the last things you would think of. What does economics have to do with love? Most people would say very little. But what if the principles of economics could actually help you out with something as personal as love?
Let’s start by taking an honest look at how many economic judgements are made while dating, especially online. First, you are essentially estimating your own value (whether it is accurate or not). Then, you estimate others’ value, and how their value relates to yours. What is the likelihood that the person will respond? Are they “out of your league”?
- Are you hoping to find someone relatively similar in qualities like income and education (“market theory”)?
- Or are you searching for someone different from yourself so that you both gain something from the relationship (“economic trade theory”)?
When an entrepreneur is categorized as high-risk because has a risky business, it can be a huge struggle to find merchant services. Should the individual wait weeks – or even months – to see if a bank will work with them? Or should they turn to an alternative provider and quickly secure an adult merchant account?
The same question applies in the online dating world. When you weigh your interested suitors against other potential individuals out there, you are weighing the “opportunity costs”. If you wait too long in hopes of meeting the “perfect” someone, you could miss out on a quality match.
Thinking at the Margin
According to Gregory Mankiw’s “Principles of Economics”, “Rational people often make decisions by comparing marginal benefits and marginal costs.” People seek what provides them the greatest level of satisfaction given their incomes and the prices they face. How does this apply to dating?
Douglas Kobak, a financial planner in Conshohocken, Pennsylvania explains that “When you are becoming serious, you need to consider what your partner is bringing to the table besides love and a good time. The question becomes one about the potential to earn the income needed to build wealth and live a lifestyle you want.”