Applying Economics

So a buddy of mine just emailed me complaining about his luck with the ladies, and since I've been in class the past week refreshing my econ knowledge, I thought I'd take the chance to do some "analysis" of his situation.

I think you have a few basic economic factors working against you. (yes, clearly I've been in economics and finance classes all week). Quality in this case would mean the overall value of the girl, and "price" meaning the total amount in tangible and intangible assets you are willing to give.

1) You are in a market where the "supply" is constrained and "inelastic". Even if the "price" your willing to pay goes up a lot, the supply doesn't change significantly - assuming you hold quality constant - it's not like ppl are going to have more daughters just because they can marry them off well. In a more "efficient" market, you would have lower quality being matched to lower "prices", but since there is a great deal of "asymmetric information" in the market, the market operates in more of a first come first serve basis.

2) Since the market operates in a first come first serve basis, the guys that enter early on generally reap a bigger "consumer surplus", while those girls entering early would typically lose more of the "producer surplus" they may have gotten if they waited. However, they are compenstated for their surplus by trading off "risk".

3) As the age of both the guys and the girls go up, the girls demand more "producer surplus", but although the guys have greater "assets", their demand for the older women do not go up proportionally since there are "substitute" goods - i.e. younger women - who are willing to give up more surplus to offset risk. However, because the markets are inefficient, it is difficult for these guys to participate in the substitute market. Yet the demand for women steadily becoming more inelastic as guys age - so for the same quality they are willing to pay a higher price.

Net net, since HK is so small, it is highly likely that all the good ones are taken early on, since any one that's got a good one will keep it. The older you get, the more demanding the woman, and for the same quality you'll need to have more money/more love than before. You have 2 choices to optimize your surplus: go younger so you can get high quality for low "price", although you take on greater risk, or shell out a high "price".

Otherwise, you should exit and participate in a different market - I hear China is growing... ;)

Econ is awesome. It's so full of sh*t. HAHAHAHHAHHAHAA...

I'm such a geek. Of course I should have known that on the email was an econ major, and Arthur's reply:

econ is full of sh*t. the only thing that i agree to your paper is your economic observation that China is growing. however, i recommend that you enter this market with caution because i'm sure you all remember the economic theory on "Lemons" - girls, cars... arent they just a commodity... haha j/k

To give you some hope tim. i'd like to highlight that despite all high quality girls are highly likely to be taken when they're young due to "asymmetric information", they are not all taken by equally high quality guys and these girls can exercise their "option" to break-up.

It's amazing how random our conversations can be. (^u^)