With Valentine’s Day colliding with the fifth day of the Spring Festival, love is in the air, and economics is on the mind. Here are two tales where romance meets rationality.
The Economist’s cost-of-loving index
Love, they say, is priceless. But let’s face it, showing off one’s financial prowess can be quite the love language in today’s material world. Valentine’s Day, in particular, turns into a veritable showcase of affection-measured-in-dollars. According to the National Retail Federation, the average American is expected to shell out $186 to woo their Valentine this year.
The Economist presents an intriguing take on this with their “cost-of-love” index, ranking cities based on the expense of a romantic night out. But let’s be real, if a simple dinner for two is setting you back $400, you’re probably dining with a buffalo on the table. While the data might seem a tad exaggerated, it’s not entirely off the mark when you factor in the extravagant gifts, luxury hotel stays, and, of course, the opportunity cost of love.
Despite Shanghai is indeed crazily expensive, eating for $200 per person, even for Valentine it’s too much. And I’m surprised that HK is not on the rank.
The Art of Playing Hard to Get
Here’s Principle Zero from the world of information design:
When there is a conflict between the designer and the player(s), it will, in general, be optimal for the designer to obfuscate, that is, hide information from the player(s) in order to induce him to make choices that are in the designer’s interests. And con- ditional on obfuscation being optimal, it may not be optimal to hide all information, but will, in general, be optimal to partially reveal information. This issue already arises in the case of one player with no prior information.
Bergemann and Morris (JEL 2019), Information Design: A unified Perspective
In the game of love, if we’re not thinking about the long-term impact of our actions but merely focusing on getting the other person to behave a certain way, the best strategy is to be a master of ambiguity. For instance:
Potential Partner: “Hey, are you free tonight? Maybe we could catch a movie or hang out?”
[Wrong move]:
You: “Absolutely! What time?”
[Right move]:
You: (After a suspenseful pause, say, some hours at best) “Hmm, sounds interesting…” (Keep it casual, almost indifferent, yet with a hint of flirtation.)
The stars align when the gravity of love is maintained at a balance, ensuring love remains in orbit rather than drifting out of control or crashing too close. Good luck!