Bastiat’s Bastions

Someone e-mailed me this article from CNN.com. I’m not sure why. I am single, but I’ll let you in a on a secret – I don’t earn enough to get invited to the event described. I checked in just a under the $500,000 line this year. Perhaps it was my supermodel good looks? I digress.

In any event, the article describes a dating event held in NYC. To be invited, you had to be a man that earns a whole bunch of money, or a woman that is a whole bunch of hot. The event was called the first-ever “Natural Selection Speed Date: Rich Guys & Hot Girls event.”

Why is this interesting to an economist type – or budding economic students?

Believe it or not, some economists like to think about marriage (not this one). You might have guessed it, but economists analyze the process of searching for a perspective spouse in a similar fashion to how one might analyze searching for a job, or even an appliance or new car. Let’s first talk about “search” in terms of cars.

Take for an example, someone looking for a new car. Let’s imagine that people know what type of car they want, and that there are several dealers that sell the exact car they want. But let us suppose that the consumer does not know the price each dealer is charging unless the consumer physically visits the dealer’s lot. This consumer must “search” for a good price. The consumer knows that there is a distribution of prices – some dealers charge higher prices while some dealers charge lower prices – but doesn’t know which dealer is which.

How many car lots should the consumer visit?

Should the consumer purchase the car from the first dealer? Likely not. Visiting a second dealer might result in finding a lower price. Perhaps a third or forth will result in a lower price still. But if the consumer has already visited 99 dealers, is it likely that a visit to the 100th dealer would result in a lower price? What are the odds that the last dealer is the dealer with the lowest price? Pretty slim.

What I am trying to point out is that there is a marginal benefit for each additional “search”. The marginal benefit is derived from the likelihood that this extra search results in a dealer that offers a lower price than has previously been offered by all other dealers. The marginal benefit of each search declines as more searches have occurred.

There is also a marginal cost for each additional “search” – the time and energy it takes to visit the dealer. This cost is quite likely close to constant for each additional search.

Simple economic theory tells us there is an optimal number of visits to dealers. Likely more than one, but likely less than all. Also, the more costly it is to check out prices, the fewer searches will occur. If searches are cheap, say if everyone posts their prices on the internet, many searches would occur.

Ok, but what does this have to do with dating?

Think of a date as a trip to the car dealership (not a good place for an actual date, though). Hopefully, you are not trying learn the price of your date (that’s illegal), but you are “searching” for a potential match. Just as you wouldn’t marry the first person you dated, you wouldn’t want to date everyone before you decided to whom you wish to get married.

I think it is comical that people are calling the people that attending the dating event shallow, crass, or gold diggers. In fact, I think they are just smart. People know what they want. Would you call someone crass if they were interested in fancy furniture and bypassed shopping at Wal-Mart? This event is designed to lower the cost of searching.

As a non-Louisianan, one thing that strikes as different about Louisiana is that 90% of the people living in Louisiana were born in Louisiana. I’d claim that is a higher number, and that people who are born in this area tend to stay in this area. I would claim that the average Louisianan is not as mobile as the average American. In addition, particularly in this area, people have grown up in small towns.

There is not as much room to comment on this post, so I’ll give a bonus point to the first person who gives a good answer to this question. How might folks having less mobility affect the average age at which people get married in this area? Explain in the context of a search process. Why?

–CT

It’s hard to have missed all the talk about Mike Vick, dog fighting, and his plea agreement.

There are some other interesting angles to this whole affair. How much money did Mick Vick lose? Will he play in the NFL again? Should the NFL Players Association fight to ensure he is able to play? All interesting to me, but instead this post is about whether or not there should be a law against dog fighting.

I know some people love dogs – my aim is not to offend you. For the record, I like dogs – I am hoping to get one soon.

But I want to put that aside for a moment to think about the economics of this law, and other laws. Essentially this is a commentary on the law of property, or simply “property rights”. The last time I checked, dogs were indeed property.

What rights are typically associated with owning property? Suppose you purchase a car – that is, you obtain the property rights to car. This gives you certain rights – you can drive around the car, you can change the oil, you can paint you car red. You can even sell the property rights to your car – transfer your rights to another person. If someone violates your property rights by, say, stealing you car, you can call the government and they will help you out. Lastly, you can take a sledgehammer to your car and destroy it if you want. You may choose to destroy your own property – it is not illegal.

Of course, even with a car, your property rights are limited. You can drive your car down Main Street, but you can’t drive you car through a crowded shopping mall. You can drive on the right side of the road, but not on the left side of the road. You cannot run over people in your car. Why not? What is the economic justification for such restrictions?

I hope that is easy – each of the activities that are restricted above would have violated someone else’s rights, caused suffering, or made it more likely this would occur. People are not allowed to run over people in their cars because running over people clearly causes harm to the person that is run over. In all cases, the law is written to ensure that other people (people that are not the driver of the car) are not adversely affected by the decision of the driver. (Bonus question – can you think of something about driving that is entirely legal that nonetheless adversely affects other drivers?)

So, if dog fighting laws are in the same spirit of other property laws, it must be the case that there is someone who is harmed by the act of dog fighting, right? Who is the injured party? Is your answer the dog? Do dogs have rights?

I bet I know what you are thinking; a dog is a living thing. Grass is living? Cockroaches? I bet I know what you are thinking now; a dog is an animal. But there are no laws protecting roosters in the state of Louisiana, or goldfish. Why?

Explain to me where and why the line is drawn? Why not a law protecting me from smashing my car?

Two things I think I might see coming…

One issue might be whether or not the animal you are talking about is personal property. For example, a dog or a goldfish is personal property. A deer is not personal property.

Secondly, if the world “moral” shows up in your answer, should it be illegal to be immoral? Is it illegal to be immoral? Can you give me an example of another activity that is illegal because it is immoral (and doesn’t harm a person other than the decision maker?)

Again, personally I don’t condone dog fighting, and I am not posing this question to be a smart aleck – I want you to help me understand, and for you to think about the economics of property law.

–CT