Wednesday, June 06, 2007

An Economists Night Out

A very good friend of mine is getting married in July, and many of his friends (including me) got together to go out in celebration. However, this was not planned to be the proverbial bachelor party. That is to say that there would not be a stripper. To put it simply, it would be a night out with friends.


Throughout the night everyone (not me personally, everyone else) made our good friend wear a shirt denoting him to be “THE BACHeLOR.” (Sic) On the back of said shirt was a “Grope-Me-Ometer” (sic) so that anyone who groped him would be able to sign their name on the back of the shirt.


So, there’s your setup. While I would never do this to my friend, or anyone else for that matter, I decided that in order to spend time with my friend, a tradeoff of my friend embarrassing himself was allowable.


While we made a first stop at a bar that was not too busy, the group thought it better to move to another establishment. Better yet, a bar knowingly to everyone as having only homosexual patronage.


Unfortunately, they failed to realize that their plan didn't have a "let's allow Mike K to wait somewhere else while this goes on" contingency. Now you may say, gee Mike, "why so scared of being in a gay bar?" Well, I'll tell you why...


This blog post from Emil Steiner, which I read just two days prior to our adventure, gets to the heart of the matter.


From Steiner’s post:


In her opinion, deputy tribunal president Cate McKenzie found that "allow[ing] large numbers of straight men and women and lesbians into the bar could 'undermine or destroy' the convivial atmosphere that the Peel Hotel sought to create for gay men."

Now, I agree with what Steiner writes on later in his post, in that the ruling might be interpreted as saying that different lifestyles can’t co-exist with each other, and that is a bad message. But back to my point…


What the article told me was that our group’s presence at this bar might not exactly be appreciated. Soon after our arrival, irony decided to show its way through the door with a bachelorette party, and as serendipity would have it, they were our age. (If you read the post from Steiner, you’ll see that in theory the bachelorette party might not help our situation). But, you might still be thinking to yourself though that I’m just making this problem up. Well, let me try to refute that very reasonable argument.


I can’t tell you how many times we were suggested that another bar was a much more happening scene that particular night. But being that I don’t drink alcohol, I was able to see under the “signaling” that the bar patrons were trying to coax us out of their establishment and get out of their hair.


I guess I can now say that I have, in fact, lived out one of the story lines to an Electric Six song.


We soon left for another bar. As luck would have it the bachelorette party arrived there as well only minutes after. Having another group of ladies there that our group had befriended is vital to the real economics for the night.


Sitting next to my friend, let’s call him George; he had started conversing with one of the members of the bachelorette party; the sister of the bride / maid of honor to be exact, and a very pretty lady if I do say so myself. Another one of our friends lets call him Richard, showed up, and the conversation immediately had gone over from George to Richard. I was pretty amazed at how quickly this was done, but it wasn’t new to me. I had known Richard actually from a few years ago when I was in college, and I had observed his personality and charisma first hand. Richard has always been a magnet for women since I’ve known him. What surprised me was that he was able to take the conversation away from George, whom I think is a stand up guy, so quickly.


Well, needless to say George was surprised…to say the least of his reactions. What was the crux of the economic issue though? Well, first in terms of an overall market perspective, Richard operates like a monopoly. Actually, that may be too much of a stretch. Let’s say that Richard operates more like Microsoft, and someone like George is like Apple/Linux. That is to say, Richard already has a girlfriend, and yet he can still attract more clients / women. Why? Well, we can deal with that in another post.


Backing off from the market perspective, how was I able to have such a different reaction then George? The answer comes to us from looking at things as an economist again. Now, a communications major might say, “George felt that he had lost face.” As an economist, I won’t disagree with that, but I’ve been able to cope with Richard and the reaction that women have to Richard by simply realizing that this is the market operating.


If a woman were to be talking to me, and then start talking to Richard after only ten seconds of his arrival, I could get mad as I used to when I was a na├»ve freshman in college. However, what I’ve found out is that Richard has most likely one of two things: a great personality like mine, or an even better one. That is to say, Richard produces either as good a product that I produce, or better. It is, in fact, that simple. Now, when I say “better,” I mean “better for girl x.” It’s really just a better product for her, so she’s making that choice as a consumer.


There’s another way to look at this as well. Essentially, if and when you’re talking to someone whom you’d like to “court” (I have no other way of nicely saying, “Someone you have the jones’ for”) you’re starting the beginning of contract negotiations and looking for signals. Now, at what point in the relationship someone says “Let’s not entertain anymore contracts” (i.e. let’s be exclusive to each other) is up to the couple. So, technically, if Richard’s lady friend (remember I said he was seeing someone) sees his actions as a breach of contract, then maybe they’ll have to restart negotiations.


Tim Harford did a great job explaining this:

In 1920s America, courts would enforce ”breach of promise” suits for ladies who had been promised marriage, slept with the cad and then been dumped... Courts no longer do this, which is why it became traditional to supplement such proposals with non-refundable deposits, to be worn on the ring finger.

So, while George can be mad that Richard stole the conversation of our new lady friend, I had to marvel and take comfort in how the market works. The lesson is, in the beginning of contract negotiations we can’t help if the other party entertains other offers, or ends up taking them. And with Richard in particular, while he may have a relationship of his own, he hasn’t given his lady a “non-refundable deposit to be worn on the ring finger,” as Tim Harford put it, and technically he might be allowed to entertain other offers if his current contract allows him to (i.e. his girlfriend says it’s okay to talk to other women in bars).


Also, maybe for another blog post, we can talk about the different interpretations and possibilities of what “entertaining other offers,” means. Also, we might be able to discuss at what part of the contract “due diligence” is required and completed. There’s a lot of grey area in there, and in the end, the two contracted parties involved in a relationship are the ones who set and enforce the rules for each other.


I should start bringing textbooks to bachelor parties.

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