Sunday, 11 October 2015

Two books on economics and romance

Economists aren't exactly known for their romantic tendencies. Which is why it is unusual to see several books recently on the topic of economics and love, romance, etc. I've read two of them in the last month or so.

The first book was "Everything I Ever Needed to Know about Economics I Learned from Online Dating" by Paul Oyer, a professor at Stanford. This book is a delightful treatment of how economics can apply to a wide range of activities, not just online dating (though obviously, that is the central theme of the book). The topics that Oyer covers are mostly unsurprising, including: search theory; cheap talk; network externalities; signalling; statistical discrimination (where Oyer takes a stand much closer to mine than do Gneezy and List in their book); thick vs. thin markets; adverse selection; assortative matching; and the returns to skills.

There are some highlights to this book, notably on the second page when Oyer remarks:, eHarmony, and OkCupid, it turns out, are no different from eBay or On all these sites, people come together trying to find matches. Sure there are a lot of differences between someone selling a used bowling ball on eBay and someone signing up for, but the basic idea is the same. The bowler needs to think about how to present his bowling ball to get what he wants (money, presumably) just as the participant needs to present himself to get what he wants (a partner in most cases, casual sex in others). It's really not that different.
As you read through the book, Oyer may just convince you of this. Although he couldn't convince me that online dating isn't adverse selection personified (literally!), and my ECON110 students will continue to laugh their way through the tutorial example on online dating. But, [potential spoiler alert!], at least there is a happy ending to this book.

The second book is "The Romantic Economist - A Story of Love and Market Forces" by William Nicolson. While Oyer (understandably) takes a fairly research-based approach in his book, Nicolson's book is much more a narrative. It's the story of Will's (unsuccessful) attempts to apply rational economic thinking to his love life. This book was a lot of fun, even if you won't necessarily learn as much about the applications of economics in it.

The book does cover a similar set of topics to Oyer's: supply and demand; the efficient market hypothesis; market power; game theory; signalling; bargaining power; investment; credible threats; sunk costs and opportunity costs; and backwards induction. The book also has some highlights, like a model of sweethearts and dickheads (where sweethearts find it difficult to signal that they are sweethearts rather than dickheads), the game theory of toilet seats (I'll be using this example in ECON100 next year for sure!), and the opportunity costs of being in a relationship. Unfortunately, the book doesn't have nearly as happy an ending.

One small criticism of The Romantic Economist is that it is written from the perspective of a man, and does come across in a lot of places as pretty sexist (although if you can suspend your indignation for the duration of the read, it is pretty funny too). Nicolson does provide a disclaimer early in the book, and rightly I think it invites an opportunity for a similar book from a woman's perspective!

Both books are recommended - Oyer's if you want to learn some real-world applications of economics (backed by robust research in most cases), and Nicolson's if you're looking for some light reading related to economics.

No comments:

Post a Comment