The Economics of Love

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We can consider love primarily as a give-and-take relationship.
Human interactions can be thought of as involving some degree of trade.
Even casual interactions conform to some mutually accepted rules.
You pass the same person in the neighborhood every day on your way to work.
You may merely wave in recognition, or gave him a simple "How 'ya doin'?" He responds "Fine.
" You expended little energy and he responded in kind.
It was an even trade.
Neither party desired more or expected more.
The words or gestures may vary from time to time but both parties follow the rules.
If either party stops to talk, the relationship reaches a new level, requiring more effort and more commitment from both.
Closer relationships require more giving and result in more getting.
Comedian Larry David quips tht he's rather be robbed than become involved with his neighbors.
Robbers only take your things; neighbors take your time.
One popular view is that all social interactions are based upon self-interest.
According to this concept we are motivated in maximize gains and minimize costs.
As we evaluate a potential relationship we analyze what it will take to engage in the relationship and what we will get out of it.
Economists call this a cost-benefit analysis.
Social psychologists label it "social exchange theory.
"A character in the old TV series "Thirty something" suggests that men trade intimacy for sex while women trade sex for intimacy.
Giving and getting are the currency of business and all negotiations.
You decide to go to college because you anticipate that a college degree will bring certain benefits.
You expect to become better educated, to be eligible for a higher paying job, to meet new friends and engage in new experiences, to gain respect and social status.
But college will also cost you in terms of money, time, effort, and perhaps having to forgo other things you would like to do.
If you desire to pay this price it is because you believe that the advantages and outcomes outweigh or at least are worth the cost.
Some psychologists study how people make such decisions on the basis of the value of the outcome and the individual's expectation of achieving that outcome.
However, such decisions are not always easy.
People may misread the value of the outcome, positively or negatively.
They may overestimate or underestimate their chances of achieving it.
Emotions enter into these perceptions.
Love, involving both feelings and behavior, can be analyzed on the basis of economic principles.
Decisions are often made on the basis of fuzzy perceptions of value, inadequate information, intense physiological inputs, unrealistic expectations and poor judgment.
You decide to purchase a CD.
You tell yourself that you need to own the new disc because the sound is so cool.
But is it really because the cover design arouses some hidden feelings completely unrelated to the music? Love can be that way as well.
Sometimes we make decisions about relationships purely on emotional bases, ignoring practical considerations.
You may totally distort the potential value of the relationship.
Bartering takes place in love relationships based upon what is gained by each party and what is given.
We can regard love as a marketplace where partners try to get the most for their commitment.
Gains and losses in love typically are not monetary but provide an exchange of emotions, rewarding experiences, satisfying communications.
Relationships that provide greater rewards will last longer.
In intimate relationships, rewards consist of companionship, sexual gratification, support and comfort in times of stress.
There is a sense of consistency.
A partner is someone to be counted upon.
Costs are judged in terms of the time it takes to maintain the relationship, conflicts that may occur, compromises and sacrifices that may be necessary to maintain the relationship.
While consistency is initially satisfying, it also brings a certain loss of freedom.
It is assumed that a partner will not initiate another relationship with someone else.
Maintaining the relationship may mean giving up good times spent in the company of friends.
The most satisfying relationships achieve a healthy balance.
The benefits and cost accruing to one partner should roughly equal the benefits and costs to the other.
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