Wednesday, May 28, 2008

Socially defective economists

From time to time economists like to analyse human relationships through whatever economic model is occupying them at the time, thinking they're offering some insights. Like this from the EconLog ("insights in economics") blog:
One of the examples [of the idea that a lot of human behaviour can be explained as an attempt to signal something about onesself to others] concerns dating. If the point is to signal to the person that you are healthy, wealthy, and intelligent, why not just bring your health records, your bank statement, and your SAT scores?

One hypothesis... is that you would not want to date someone who went for those sorts of signals. Somebody who will hook up with you based on such simple information could just as easily cheat on you or dump you when someone else comes along and provides similar information. We want to go out with people who are "discerning," which in this context means that they signal a habit of processing other people's expensive signals. That in turn makes it more likely that they will be loyal...

So you have what I might call co-operative signaling. You signal to me that you are looking for "deep" signs of my health, intelligence, or whatever. I take that as a signal that you are into long-term relationships. So I then go through the rituals of dating and signaling.

Huh?? If I might offer an alternative hypothesis, perhaps you just don't want to signal that you're a socially defective economist.

Fortunately for such economists, they ultimately decide to leave their CVs at home before heading out on dates, apparently after doing a cost-benefit analysis that suggests that the obvious efficiency benefits of a first date spent going through each other's personal files may be outweighed by the cost that presenting your first-date portfolio introduces a selection bias for partners with a higher than average inclination for infidelity.

What the otherwise fairly interesting folks at the EconLog blog are signalling to me is that they don't understand human behaviour. Which makes me question the extent to which they really understand market behaviour either.


justakim said...

haha you made my day

Doug said...

Deeply funny ... and I thought behavioural economics was meant to be saving the discipline from this kind of ridicule!