JP Villanueva
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It’s Pride Month and I am happy that there are people around me who just recently started enjoying their budding same sex relationships. So, it got me thinking, how could economics explain the process of dating and the go abouts of relationships?
Economic theory can provide interesting insights into dating and relationships, often using principles from microeconomics and game theory to analyze how individuals make decisions in romantic contexts.
In utility maximization, individuals seek to maximize their happiness or satisfaction (utility) when choosing partners. Of course, with the smorgasbord of choices of who can be one’s partner, the search for the perfect partner requires looking for the one who would give him/her the highest satisfaction.
If cost-benefits analysis is used, people weigh the costs and benefits of starting or continuing a relationship, such as emotional investment, time, and resources. During the dating period, this may seem like the trial period of a paid-for application or software, the individual would check if it will blossom into a deeper relationship, will he/she benefit or not from that relationship given the time, effort and love that one invests in that relationship.
Using the market dynamics, the dating market can be analyzed in terms of supply (available partners) and demand (individuals seeking partners). An equilibrium point where the number of people seeking relationships matches the number of available partners. Imbalances can lead to competition or scarcity.
The Prisoner’s Dilemma can be applied to commitment issues, where mutual cooperation (commitment) yields the best outcome, but individual incentives may lead to betrayal (cheating). In the same way when People send signals to indicate their suitability as a partner, such as displaying wealth, kindness, or good health.
Using behavioral economics, in terms of loss aversion, people may fear the end of a relationship more than they value its continuation, affecting their decisions and behaviors. While for Prospect Theory, individuals assess potential partners by weighing perceived gains and losses rather than absolute outcomes.
Using the concept of opportunity cost, for Time and Resource Allocation, individuals must decide how much time and effort to invest in dating versus other activities (work, hobbies, etc.).
And given a set of alternatives, considering the opportunity cost of staying in a relationship versus seeking a potentially better partner.
These theories may be applied in many different ways. In Online Dating, algorithms on dating sites use economic principles to match individuals based on preferences and compatibility, similar to market matching theories. In Marriage Markets, demographic studies and economic models analyze trends in marriage, such as age at first marriage, divorce rates, and the economic benefits of marriage. In Relationship Dynamics, economic concepts help explain dynamics such as bargaining power within relationships, resource allocation, and the impact of external economic factors (e.g., job loss, economic downturns) on relationships.
By applying economic theory to dating and relationships, we can gain a deeper understanding of the complex decision-making processes involved and the factors that influence romantic interactions.
In hindsight, even if there are many economic theories that can explain the go abouts of dating and relationships, and in how one can succeed in this dog-eat-dog world of love, the fact still remains that love is something that cannot be explained rationally. Love is something that is felt and not thought about. For someone to fully feel the love, one has to let go and just trust the process.