The Economics of the Dating Game

And the Lemon Markets in School

And now for somethign a little more light-hearted...

Someone once remarked that it is unusual for there to be so many unattached people leftover in year 3s. And looking around me, the alarmingly high number of single people do seem to run counter to the common saying that the expiry date of a college student is her third year. For if so, then everyone would have expired - and happily so as well.

As i begin observing the two extremes - one pool of happily-attached-but-also-happily -switching-partners pool and the other of the swinging singles - it became apparent that a lemon market exists within the dating pool in my school.

And no wonder. As proud disciples of Adam Smith's invisble hand, we are all highly driven individuals powered by self-interest.

For the non-economists, the Lemons Principle states that in a market with information asymmetry, the presence of low-quality goods will drive the high-quality goods out of market.

How it works is this: if you as a buyer do not which cars in a second-hand car market are good (the plums) and which are not (the lemons), you will rationally only pay the average price for any given car. But this price, weighted downwards by the lemons, is beneath the reservation price of the sellers of the plums - who will then withdraw their cars from the market.

Thus, there will be more lemons than plums in the market. As an astute buyer, you will further revise your offer price downwards, driving the semi-plums out as well.

So at the end of the day, wha results is a pooling equilibirum in which there are only lemons on sale or no transaction at all.

And the Lemons Principle is exactly what I am seeing now.

The good eligible guy will think he is too good to go after just any other girl. So he decides to withdraw until a real plum comes along. And the good eligible girl plays it coy because she is cynical of the quality of suitors. Why would a good guy go all out for her if he isn't a lemon right? So the interest gets misread/read as desperation which plainly reeks of lemon.

Then what about the lemons with low reservation price? They've got to be doing something right?

And precisely because they are lemons, they go all out to try and secure - another lemon.

Because the guys daring to try and the girls willing to try are both very eager to try - a relationship, that is - they both end up with each other - lemons that may not necessarily be right for them. Not to say this people are bad or social misfits, but in trying too hard to get attached, they may just end up with the first guy/girl or who comes along and this person may be wholly unsuitable for them afterall. Which is perhaps why, at the slightest prodding from a new lemon, they drop the old one.

Yet these are still the people who are still willing to try again. But their reputation as flirts and playboys send out a strong signal to the silent plums to stay away. Confined to their same old lemon pools, they have no qualms of swapping partners which is exactly what i am seeing today(you shoudl really listen to some of these stories...), while the boring plums remain as aloof/single as ever.

So the moral of the story really is....
The old adage of judging a man by his action may well be complicated by the lemon's problem. A man who does too much may well be as terrible as the man who does nothing. And a girl who seems to take no effort may not stay with you beyond three months.

So guys what you gonna do?

That said, good luck guys. And i wish you love. =]

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Haha. Congrats on making it this far. I'm bored with microecons hence my new 'theory' on dating which is utter hogwash. Peace laugher fun and joy everybody.