By Chris | February 11, 2008
I’ve been thinking about marriage a lot lately. Maybe, it’s because my brother is in a serious relationship where marriage is a very real possibility (my mom is sure pushing for it). Maybe, I’m kind of a sap and think about my future plans more than most guys. I’m sure part of it involves seeing more of more college friends tying the knot. I used to subconsciously worry when I saw a potential mate of high quality leave “the market”. Would there be a sufficient pool of candidates left when I was ready to get married? But, after reading this article (HT Tyler Cowen) and The Logic of Life, I’ve realized I was wrong. I was looking only at one side of this two-sided market. Every marriage of my peers is taking a prospect off the market, but it’s also eliminating one of my competitors. If there are more women than men in my niche of the marriage market, then each marriage actually strengthens my bargaining position. It’s like exchanging pawns when you are ahead in chess. I particularly like Tim Harford’s illustration of a Marriage Supermarket where 20 identical men and 19 identical women bargain to split 100 dollars in potential benefits from marriage.
From The Logic of Life, page 69:
You might think that the slight scarcity of men would cause the women some modest inconvenience, but in fact even this tiny imbalance ends up being very bad news for the women and very good news for the remaining men. Scarcity is power, and more power than you might have thought.
Here’s why. One woman is going to go home with neither a spouse nor a check from the cashier. That’s bad news for her. What is less immediately obvious is that the women who do get a spouse are also going to be worse off—and their loss is the men’s gain. Remember that a couple gets to split a hundred dollars when they show up at a checkout; assume that the nineteen couples have provisionally agreed on a fifty-fifty split.
Th odd woman out, contemplating going home empty-handed will make the obviously rational decision to muscle in on an existing pairing…The bids will fall until the woman who faces leaving alone is offering to walk through the checkout with some lucky guy and accept just one cent as the price of doing so. He’ll get $99.99; her one-cent profit is better than nothing at all.
We are now left with 19 men and 18 women. The same process occurs all over again. By the end, every man gets $99.99 and every women, except the single one, receives a mere penny.
These concepts weren’t intuitively obvious to me. Of course, the real world is much more complicated than Tim Harford’s model. And, Harford prefaced the example above with, “There is, obviously, a lot more to love, dating, and marriage than rational choice theory…” Yet, as an aspiring economist, it’s nice to know that in this critical market, scarcity isn’t working against me.