Sunday, July 05, 2009

Relational Economics

I'm on vacation, which means I get to spend some quality time nerding out with my brother. We just used a big chunk of beach as a chalkboard to explore this question:

Can relationships be meaningfully described as a series of rational decisions?

My mom's immediate answer, when she walked by to see what we were up to, was "don't be silly." First off, looking at the decisions that get made in a relationship doesn't really tell you about the heart and soul of that relationship, the emotion and subtlety that make that relationship work. Second, anyone who has experience with these things will tell you that relationships can be anything but rational. There's no rhyme or reason to love, and we had all better get used to it.

Despite the fact that she's my mother, and therefore always right, my brother and I persisted. Let's say, for the sake of argument, that relationships can be described that way. That means that a relationship can be thought of as a series of decisions that people make, and each of those decisions can be broken down to a sort of cost/benefit analysis that has one logical conclusion. This kind of a theory isn't meant to be practical, like most real world examples of physics most real world relationships are far too complicated to be predicted with any precision. (Physics can't, in any practical way, tell you how a teapot is going to shatter.) It could be interesting in thinking about overall trends in the ways that people connect with one another and communities come together.

Because, irrational as relationships seem, the decisions that we make in them almost always ARE rational (or at least as "rational" as our decisions to purchase things, and that hasn't hurt the field of economics.) To test this my brother and I decided to explore the following scenario:

Bob has called Alice and invited her to play golf on Saturday. Will Alice say yes?

As I've mentioned before in this blog, decisions about time are particularly important to understanding what makes relationships tick. A quick poll of the beach seemed to hint that this was, in fact, a problem with a rational answer. When presented with the scenario, people immediately sought to define factors which would define a rational decision.

"I think she would," said a passing six year old "because girls like golf."

Her friend, eager to contribute to the problem, added another condition "She might stay home if she was sick though."

The response of these two girls was telling. If the decisions that we make in relationship were completely irrational then they would have simply shrugged their shoulders, as they would if I asked them whether it would rain in a month. Their guts and life experience told them that the situation with Bob and Alice COULD be understood if the right initial conditions were known. That is, if we know enough about how Alice feels about golf, enough about how she feels about Bob, enough about her other options for that Saturday and a few other tidbits of information then we can predict her decision with at least the theoretical certainty that economists predict real-world economic behavior. My brother and I had fun for the better part of an hour mapping these criteria on the sand, but I won't bore you with them here.

Instead, I'd like to talk about the possible implications of this rationality. Let's pretend for a moment that the statement at the beginning of this post is true. If it is, then the process by which relationships form and thrive can be mapped in a new sort of theoretical detail. Rather than bitching about dating, we could tease the process of dating apart and ask ourselves whether a better system could be designed for producing intimate human relationships. Rather than trying to build professional communities by throwing 500 people with business cards in a room together we could begin to build a real set of knowledge about what makes relationships happen and what doesn't. The art of community building seems stuck at the developmental stage of medieval medicine; a conglomeration of pet theories, wives tales and one-off solutions. It seems like we can do better.

I'll leave it here for now, and solicit people's responses to the questions above. Can relationships be described as a series of rational decisions? When (if ever) can't they? And if you had to map the criteria influencing Alice's decision to play golf with Bob then how would you do it?


Bitsy said...
This comment has been removed by the author.
Bitsy said...

"or at least as "rational" as our decisions to purchase things, and that hasn't hurt the field of economics"

As a budding economist, I have to disagree. I think, believing people will behave "rational" ways has very much hurt economics.
See: Greenspan, 82, acknowledged under questioning that he had made a "mistake" in believing that banks, operating in their own self-interest, would do what was necessary to protect their shareholders and institutions. Greenspan called that "a flaw in the model ... that defines how the world works." (

Which isn't to say that rational choice model doesn't have uses, but, I think people stretch it too far.

See the Invisible Heart: Economics and Family Values by Nancy Folbre as a place to start on an economic literature about care work, and working under relationship constraints.

I think the key question come to "how she feels about Bob." While there might be some things that predict this (see 's attempt), ultimately there are going to be things that can't be explained. Alice might just get slightly angry when Bob talks, or the might just click and I think relationships a this level involve a great deal of, if not true random-ness then complex-ness (chaos).

Which isn't to say, I don't think it is a valuable exercise to try to predict these things. I think OKcupid does a reasonable job of predicting who I might be friends, or at least, in friend groups with.

I also think there is a reason people cluster around sci-fi communities, or football communities, etc. So, there is something about the type of people people get along with. And "trying to build professional communities by throwing 500 people with business cards in a room together" is a stupid idea (for those of use who aren't on the far extroverted end of the spectrum) if I ever saw one, and would welcome something better.

DJ DJ said...

Agreed, Bitsy. In a way, I'm doing this as a new angle on rational choice theory (in my experience "irrational" behavior often results from people prioritizing relationships over money, so understanding how people prioritize relationships seems prudent.)

Thanks for the book, I'll have to check it out.

I also want to challenge some of the assumptions in your analysis. The key question does NOT come down to how Alice feels about Bob; Alice's feelings about golf, the opportunity cost of her time and her golfing budget could all be equally relevant. And how Alice feels about Bob can't necessarily be broken down in terms of compatibility (okcupid style) and happenstance.

Let's say that there are 3 categories of factors influencing her decision:

Resource cost/benefit- golf takes time and money, both of which have an opportunity cost which needs to be taken into account.

Emotional cost/benefit- if Alice likes golf and Alice likes hanging out with Bob then the afternoon will be fun. If she doesn't like either of those things then the afternoon will be sucky.

Relational cost/benefit- spending the afternoon golfing with Bob will (probably) improve Alice's relationship with Bob (they'll get to know one another better) and improve her relationship with golf (she'll be a little more experienced.)

Everyone who I've posed this question to (except the six year olds) has framed the problem in terms of the relational benefit that Alice gets. If she's interested in a relationship with Bob then she'll go, if not then she'll stay home.

So how is she gauging the future value of this relationship? If we follow rational choice theory then she's assigning a future value to the possible states of the relationship (ie having a golfing buddy) and multiplying that by the probability that that future state will occur. If she finds his laugh annoying then the probability is small, if they click really well then the probability is high.

What's interesting to me is how she chooses which particular future states of the relationship to focus on. Bob could easily be a romantic interest, a potential employee, and a potential friend all rolled into one, but making decisions that take all three of those goals into account is disorienting. For all she knows, the two of them could make a fantastic team of crack investigators. How does she know to take some future states of the relationship into account and not others?

Bitsy said...

I guess what I meant to say is: the the hardest question to deal with here, and thus the one I'm thinking about is.

The questions about weather Bob can help make her money or if she likes golf seem much less interesting to me then the question are Alice and Bob likely to become friends.

I was just going somewhere else (where I wanted to go) with your question

Anonymous said...

Surely you have seen the recent xkcd,

The Impossible K said...

It all depends on the personalities... for instance, I tend to be uber-rational, so of course I like to explain away the decisions I make in relationships.
I like to think my decisions are rational, and really- how can you deny there is some cost/benefit analysis going on, even if it's subconsciously?
Why can't relationships be developed using rational decisions? Is it because emotion is involved? One of my favorite authors, Robert Solomon, argues that emotions are rational- what he describes as sophisticated strategies for survival. And it's true, isn't it? Sometimes the seemingly "irrational" is actually the most rational choice of all- in hindsight. Relationships play such a huge role in our happiness (or misery) that it just doesn't make sense to leave logic out of it. After all, why take a risk without a reason?

Moz said...

Bitsy and DJ, I think you’ve both got something here. Bitsy – I see that the rational choice model could potentially get stretched too far. It can turn people off to hear their experiences and relationships broken down into a set of rational decisions. But worse, I think, is the model’s assumption of costs and benefits as what drives individuals. To take an example different from Alice/Bob’s relationship, there’s my mother, who will literally get into an argument with her best friend as we’re all at a restaurant if she doesn’t let my mother pay for everyone’s lunch…spending lots of heat, some of her daughters’ social capital (ehhh..) in the process, and maybe sixty bucks (if she wins)… Now if I asked her what benefit she was getting at such a loss, she wouldn’t answer me. What’s mom’s motive here? I think it’s social imperative. A gift cycle, sort of like the ones that Marcel Mauss wrote about in 1950 in his book The Gift (only recommended reading if you have the hots for contract theory and lots of tribal law). My mother will feel indebted to return the gift of free lunch if she gets it, so she fights against the free lunch. And you can’t really go off of that other free lunch analogy… because she’s not about to conveniently identify “honor” as the ultimate benefit or anything. Honestly I think that the reason she fights like that has at least a little to do with her “Argentinity,” her generous nature, bleeding heart, whatever. Also she’s crazy though.

Anyways, I am sure that if you were to expand your questioning into a more diverse set of social situations, you would find other people engaging in gift exchanges and economic relations where they are unwilling and even unable to identify costs and benefits. Many romantic relationships, too, can be theorized as a gift exchange. They are deeply embedded in a society (or a community, if that’s what you like to call it) and so they can all be looked at as products of unique societies, yet also as unique unto themselves. So my jab here is that when trying to understand Alice and Bob, one has to be willing to look at them on a more sociocultural level. Which is not to say that you are wrong, DJ, to see the rationalization of resource cost/benefit and emotional cost/benefit. Those are very real factors that play into relationships. It’s good that you see that. They are. Also, this is why we need more six-year-olds in office. If they were smart six-year-olds, they’d probably ask whether it was the boring kind of golf or mini golf.

ImpossibleK, I’m interested in that idea of emotions as strategies for survival. But destructive emotions don’t actually do much to extend life span, wouldn’t it seem?

The Impossible K said...

If you really stop and think about it, emotions drive a lot of the decisions we make in life. They influence our buying habits, personal imperatives (like your mom's need to save face and buy lunch), etc...
But what Solomon argues is that emotions are not mere affects or feelings. They may be associated with feelings, but "the feelings no more constitute or define the emotion than an army of fleas constitutes a homeless dog". Feelings are a mere byproduct of emotions- and we have more control over emotions than we often concede.
I think, to really understand emotions as strategies for survival, it helps to see this statement from it's existentialist perspective- that is, we are responsible for our choices even though the circumstances that frame them may be out of our control.
To tie this all in....
Emotions play a huge role in relationships. They are strategies that influence our decisions and ultimately determine the course we take in life.

Anonymous said...

I found this post really interesting because in the past, I have described my choice to enter into a long-term romantic relationship as a rational decision, which is something most people don't seem to relate to. The idea of a relationship being a series of rational decisions makes sense to me, but I'm not sure how much that has to do with the fact that I'm asexual. I'm curious to pose your question to some of my sexual friends (especially the more impulsive, overdramatic ones) and see what they think.

Lanie&Becks said...

i don't think it can be a rational decisions. relationships are meant to have an involvment of feelings. Therefore if Alice finds Bob attractive she would probably accept.
its the way of life =]