Murky Love Economics

The thing about life is that its unpredictable and doesn't subject to one single rule. I would always be aware of the "universal truth" unearthed. Many ideas are inspiring or illuminating. But more often than not, there's always qualifications, in small prints, that need to be noted.

Let's take a look at some of the main points of this very interesting and well written piece by Ben Stein: Lessons in Love, by Way of Economics.

In general, and with rare exceptions, the returns in love situations are roughly proportional to the amount of time and devotion invested. The amount of love you get from an investment in love is correlated, if only roughly, to the amount of yourself you invest in the relationship.

Oh what the statistical panacea. What about business failures? What about concept like sunk cost, stop-loss in economics?

High-quality bonds consistently yield more return than junk, and so it is with high-quality love.

The problem is, as we know in the investment world, junk/investment grades can be down or up graded, reversed in a whim, even with name brands. GM might look all mighty blue chip in a day, and slip to junk status to the next. Sometimes, even professional graders - read, Moody's etc - can't provide accurate grades in time, otherwise we won't have subprime crisis. How do you expect we to excel in love bonds in which most of us are amateurs? The negative situation rings more true:

the absolutely surest way to ruin your life is to have a relationship with someone with many serious problems, and to think that you can change this person.

Mr. Stein further urges us,

Research pays off.

Not necessary. Some qualifications are required. Too much research makes you a timid investor, and too much time in research doesn't necessary gives you competitive edge in a competitive market where everybody else does the same. And we all know researches don't earn best money in the finance world, they end up being hired by the more competitive personalities.

Ok, if you think this is all too picky, I agree. However the gist of the stories is, that theory is better at rationalize than practice, and that economics is a science that cares about outcomes in aggregates and statistical results, but love is a very personal thing. While Economics can sweep exceptions as anomalies, personal pains can't.

In the end, we can at least agree that love, like many other aspects of life, needs to be "managed".

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