Obama 2008: Man vs Machine

As The Economist commented for the Obama bid, it's gonna be Man vs Machine, the wunderkind from Illinois versus Hillary's election machine.

These are the 4 reasons I dont't like Hillary:

• She is so establishment
• She puts ambitions above dignity (Lewinsky affair)
• "It takes a village"

and the 3 reasons I am for Obama:

• He is a real outsider
• He is UoC
• He drips talent

When you should NOT use the efficiency of the Internet

I am getting the past days all these impersonal emails wishing me Merry Christmas etc. It looks that people have discovered that instead of re-writing similar personalized emails, it is much more time-efficient to massively bcc send the same generic email to all their contacts. Even my exes didn’t bother to spend the 5 extra secs to put my name in the beginning of the email… There must be sthg wrong here…

This is one of the few occasions that we should not use the efficiency of the internet. When we wish by letters or emails, the underlying signal we want to give is that we care enough for some people to spend some time to wish them. Using a massive impersonal email makes the very reason of wishing void. It is like offering as a gift sthg that is totally costless: “Hey mate, I ll make you a gift, this is the link to access my public blog…”

On Dating

I always found it weird that there is no concrete model or theory behind such a fundamental human activity as dating. At its very essence, dating is about scarcity of resources, optimal allocation decisions, market segmentation, utility optimization etc. So why not approach dating as a market activity and why not analyze it using concepts from economics and business strategy?

In trying to develop such an approach, here are some initial definitions and assumptions for the dating market:

• Each participant in the market has a specific "dating value" (DV) that depends on factors like physical beauty, status, financial resources and changes during life. This value is fundamentally subjective, as is the value of every other product out there. However, for simplification reasons I treat dating values as objective -this assumption does not affect the final conclusions.
• There are substantial differences in the dating preferences between sexes (mainly for evolutionary reasons). In the trade-off between commitment (long-term relationships) and diversity (high number of sexual partners), women on average tend to prefer the first while men prefer the latter. These sex differences in preferences are the drivers of the interesting dynamics in the dating market –and the potential source of emotional pain...
• The dating value curves of men and women are different. The reason is that men’s DV is driven more by status, while women’s is driven more by physical beauty. These factors reach their peaks in different ages. Thus, as the graph below shows, men tend to reach the peak of their DV later in their lives than women. Women on average have an earlier and steeper DV peak.
• Emotional Attachment (what is most commonly called "love") can be a confounding variable, but I consider it irrelevant in the model. The reason is that its influence is limited in period and it occurs AFTER objective factors and rational decisions have played their part.When they are about to commit, both sexes are trying to maximize Mating Value, that is to get a partner with as high DV as possible.
• High DV attracts high DV.

Moving to analysis from a man’s perspective now, the big question is when to commit.

From the assumptions and graph above it is obvious that men should commit only when they are their peak of their DV.

There are two problems however:
-One is that the exact path and peak of each individual DV curve is not known. People believe in their potential to increase further their DV, but in reality life is uncertain.
-The second problem is that sometimes being in a committed relationship has positive effect on someone’s life, in other words, when people get married they don’t have to spend time and resources in dating, they focus more on careers and consequently they increase their DV much more

I believe that the best way to overcome the above problems and answer the “when to commit” question is to use the fundamental condition MR=MC.
Revenue is the utility derived by “dating more” (quantity) and dating better (quality). Cost is the resources spent on dating as well as the lack of the benefits of a committed relationship (emotional stability, etc.) In a man’s early life, Revenues tend to increase higher than Costs. But when Marginal Costs (MC) are becoming equal to Marginal Revenues (MR), well, then its about time to settle down.


One interesting question is: if men most of the time think that they can further increase their DV (ambition is wired in our genes with obvious evolutionary utility), why they actually do commit at any point? The answer is that men do pay a risk premium. They understand that there is uncertainty in life, and they are willing to commit now with someone that can potentially be of lower DV, just because of risk aversion. We can see how the risk premium in the dating market increases in cases like after wars and disasters. People feel the volatility in their lives more and consequently are willing to pay a higher risk premium and settle down easier.

How do the above explain different patterns in different markets?
In dating markets like NY or London where there are many upward mobile “high-fliers”, turnover is high and committing is very rare –exactly because people think they have lots of upside potential and they can do much better.
On the other hand, in societies characterized by low social mobility, people tend to commit early. The reason is that they feel that they have limited upside in their DVs, so no reason to wait...