Tuesday, February 21, 2006

Relationships II -- Is Hooking Up Optimal?

Last Spring, Diversity and Distinction heard about our class, and interviewed me for an article (scroll to page 18) about "hook ups."

The reporter was kind enough to send me prepared questions. Here is my complete response to her question "is hooking up optimal?":

Well, that really depends on what you mean. You can think about it at two levels: the individual level and the social level.

Individuals.

Amongst the individuals actually hooking up, if we assume that they are rational (in the economic sense) and fully informed, arguing that their behavior is sub-optimal is difficult. They choose to do it, so it must be their best available option (otherwise they would have chosen the alternative).

If the effects of hooking up are felt only by those involved, then the social planner should only intervene if he/she feels that the decision is not based on full information or that he/she somehow "knows better" then these individuals what is good for them.

On the information issue, as long as both sides are fully aware of the situation (e.g., that this is just short-term consumption -- a random hook-up), then I don't see grounds for concern. If information is asymmetric, i.e., one party is just looking to hook-up while the other is thinking that this is part of developing a lasting relationship, then maybe we should care (depending on how you trade off one party's gains versus the other's losses).

Another potential information problem arises if individuals do not understand the long run consequences of their actions. It is possible, although I have no idea to what extent, that the effort that is invested in hooking-up could be spent in some alternative manner which would produce better lifetime outcomes. That is, hooking up may have large opportunity costs that people don't fully account for. For example, some argue that dating is a learning process. When you date you learn about yourself, about what you desire in a partner, about how to effectively bargain in relationships, etc. If the effort spent hooking-up crowds out investments in dating, then the individuals might be making themselves worse off in the long run.

[Note -- One could also argue the complete opposite. Dating has nothing to do with personal growth. When people are ready for a "real" relationship they settle down. Dating in college, which has a low probability of producing a long term mate, is purely consumptive and may distract people from making productive long run investments in their human (classes) and social (friends and activities) capital. So allowing people to satisfy physical urges by hooking up rather then involving themselves in distracting relationships is a good thing.]

Alternatively, one might argue that individuals don't care enough about their future selves relative to their current self and they take actions which effectively "screw" their future selves (this is known as hyperbolic discounting).

So if individuals lack perfect information, or if they are hyperbolic discounters, then society might decide that hooking-up is sub optimal and want to reduce it -- even though no one other then those choosing to hook up is affected.

Society

The above analysis assumes those engaing in hook-ups pay all of the costs and reap all of the benefits. This may not be the case. If hooking up produces spillovers (positive or negative), then these necessarily must be accounted for and included in the analysis before establishing the efficiency (which I prefer to the term optimality) of hook-up culture.

As such, we must ask, "how are those not engaging in hook up culture affected by it?"

At the most basic level, one might raise concerns about public health and safety. If hook up culture spreads diseases, that is bad and wasteful for society. More subtly, hook up culture may (and I stress that this is purely speculation) spawn clearly undesirable behavior like rape or other sexual misconduct. Also, hooking up potentially increases the probability of people abusing alcohol (because alcohol is very effective at lowering "prices" in the hook-up market). In all three of these examples, those seeking to hook up do not bear the full cost of behavior. As a result of people seeking to hook up, others must incur costs preventing the spread of disease, discouraging sexual misconduct and caring for its victims, and keeping drunk people under control.

Slightly less obvious are the effects of a large hook up market on the traditional dating market. As the market for hook ups grows stronger, it becomes more attractive to the marginal dater (either because the price of hooking up falls or peer pressure to particpate in hook ups grows). This reduces the supply in the dating market and makes that market less productive (e.g., it is harder to meet people, there are fewer events designed to facilitate dating matches, ...). If, for some reason, the dating market is better then the hook up market (or that it is more important to have a large functioning dating market then a large hook up market), then a growing hook up market might be bad.

Even more problematic, if it is impossible to distinguish people who want to date from people who want to hook-up, the dating market can fail. If people interested in hook-ups don't care if the hook-up with a dater or player (or even worse if they prefer daters), then they might show up in both markets. If an unsuspecting dater gets "preyed" upon by a player, they may be more hesitant to enter the dating market. Eventually, this can lead the entire dating market to unravel. So all the would-be daters are made substantially worse off by the inability to distinguish players. If there are ways to separate people (and this is hard), then this is not a problem.

Ultimately, I think the key to determining the efficiency of hook ups is understanding how dating versus hooking up affects people. If dating is important for personal development (i.e., it develops human capital that can be employed to improve all relationships) and one needs to be dating consistently to maximize this development, then it is important to, at least, make sure that those who would be interested in dating can do so. Further, one may also want to actively discourage hook ups to improve the overall dating market and prevent people from making "a mistake."

Comments:
So it would really be most efficient if we can have two easily separate markets for hook-ups and relationships, so that those who do not want distractions go to the hook-up market, and those who want personal development go to the relationship market. That makes perfect sense: perfect information makes efficient market.
 
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