Games Primates Play: An Undercover Investigation of the Evolution and Economics of Human Relationships by Maestripieri Dario

Author:Maestripieri, Dario [Maestripieri, Dario]
Language: eng
Format: epub, mobi, azw3
ISBN: 9780465029303
Publisher: Perseus Books Group
Published: 2012-04-09T20:00:00+00:00

Love: The Perfect Business Solution?

From an economist’s point of view, all cooperative relationships are business partnerships: whether the goal is to make children or to run the Planet Hollywood restaurant chain (a joint business venture launched in 1991 by actors Arnold Schwarzenegger, Sylvester Stallone, and Bruce Willis) makes no difference. If these relationships are to last long enough for their goals to be accomplished, they will present the usual commitment problem. And as usual, the problem is solved by a combination of reputation effects, imposed sanctions, morality, and feelings. In the case of romantic relationships, before the commitment problem even arises, the two business partners must find each other. Robert Frank helps us understand how this process works, using another business analogy.

The search for the perfect romantic partner shares many features with the search for the perfect apartment in a rental housing market, Frank says, or if you are a landlord, the search for the perfect tenant. It takes time and effort to search for and inspect available rental apartments, just as it takes time and effort for the landlord to interview potential tenants and assess their reliability. Waiting until you have inspected all the apartments or interviewed all the potential tenants before you make a final decision would mean never making a decision. There are too many empty apartments and potential tenants to begin with, and every day new apartments show up on the market and new potential tenants call landlords. Instead, if you’re seeking an apartment you visit a few apartments, and if you’re a landlord you interview a few potential tenants to get a sense of who is out there. Then, according to Frank, when both parties meet a sensible quality threshold (that is, they find something that’s good enough), they terminate their search and decide to settle. At this point, the commitment problem arises, and the two parties try to solve it by signing a lease.

Signing the lease is necessary for two reasons. The first is that when an apartment-seeker finds a landlord, or a landlord finds a tenant, who meets their quality threshold, they never have the required information about this person’s past or the ability to predict his or her future behavior that would be necessary to make a good choice. The tenant might pay rent on time for a few months and then start skipping payments. Or the landlord could be helpful at the beginning and then refuse to make necessary repairs in the apartment.

Acquiring all the necessary information about the two individuals to predict their future behavior would take forever. If a lease is not signed, the partnership between the tenant and the landlord will deteriorate as soon as either party does something wrong or unpleasant. The analogies with the restaurant partnership are obvious. Even if the tenant and landlord each behave perfectly and provide no reason for breaking their partnership, neither party can ever be sure of having found the best possible deal; in theory, the tenant could find an even

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