The Economics of Love

You might not think this works, but there is a lot you can learn about love from studying economics. The science of supply, demand, and money has a few principles and ideas that can help you become a better strategist in the art of romance.

 

A lot of this advice you can get from firms like thefinancialdvisorsperth.com.au. You just need to adapt them to romance.

 

First, you’ll want to restrict the supply after differentiating the product.

 

The first rule of economics (and romance) is to play hard to get because it lets you increase your price. If you’re too easy to get your hands on, people won’t value you. Let the significant another feel like they’ve earned the exclusivity of your affections, so they place a higher premium on it.

 

However, this only works if you have a pitch that makes you stand out. If you’re no different from any other offering on the market, you’re not worth the extra cost.

 

The oldest adage in economics is also applicable to love: if it’s too good to be true, it is.

 

This is a double-sided bit of wisdom. On one hand, any good deal is likely to have already been snatched up by other parties. If someone is remaining single, they’re probably that way for a reason.

 

However, sometimes a good deal appears too good to be true, so no one has taken up the offer. There are times where you need to take the risk and catch the deal. After all, a good deal that’s already taken has to have attracted someone who was willing to take the risk.

 

When evaluating a relationship, do it the same way you’d look at an investment. Ignore sunk costs, and focus on opportunity costs.

 

In simple terms: don’t think about on the great times or the bad times. Focus on whether or not there are good times to come, and whether or not you could have had them elsewhere. Dwelling on the past is playing into the sunk cost fallacy, and that leads nowhere good.

 

Incur type-revealing costs.

 

See the first bit of advice. You want people to know you’re different, and that means you’re incurring a cost. You’re “spending” a resource to show how you differ from what else is on offer.

 

One way to do this is to be willing to wait. By showing that you’re willing to wait, or even deliberately inhibiting your chances of a quick payoff, you show you’re different or serious. Consider asking someone out to lunch instead of dinner, for example.

 

Think about your risk preferences. How much risk are you willing to take in a relationship?

 

Sacrificing liquidity can help your returns on investment in the long run. In other words, be prepared to spend money and sacrifice some flexibility.

 

A little self-deprecation is good. It signals that you have strong fundamentals. By being willing to talk yourself down, you show that you’re willing to take the cost of self-deprecation. It’s something that arrogant people don’t want to do and can be a great way to add value.