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Auction strategy and dating
In a standard English auction participants keep on bidding until one person is left with an unambiguously highest offer.
In a Dutch auction, which is used to sell tulips, the auctioneer starts out with a high price and keeps on lowering it until someone bites. The auction then ends.
A large literature considers the conditions under which these two approaches yield the same expected revenue.
In terms of dating, if you run an English auction you go out with many people, if not simultaneously then relatively closely bunched in time, and you stick with the one who offers the most. If you run a Dutch auction you signal clearly your standards (lowering the standards over time if need be), and stick with the first person who bites.
I believe that strongly Christian women are more likely to run a Dutch auction. Perhaps non-religious women are more likely to run Dutch auctions as they get older.
The economics literature suggests that if bidders are risk-averse, the Dutch auction is more likely to yield higher revenue (in the limiting case, grab quickly any positive consumer surplus, before it goes away). Alternatively, if the seller thinks that bidders would be more enthusiastic if they saw each other's ongoing bids, this tends to encourage an English auction. In other words, hidden but not too hidden qualities encourage English auctions.
Here are other kinds of auctions.
Posted by Tyler Cowen on October 12, 2006 at 06:48 AM in Economics | Permalink
Comments
I think that a dutch auction is not necessarily better nor more commonly used in the population of strongly Christian women. Christians I feel would use either method. I feel that the English way, going on many dates and then deciding is less religious than any because it shows judging and does not seem to follow Christian values. There are opportunity costs for all of the above types of auctions. Some auctions do not make as much money but at the same time, people may find the love of their life. All of the above auctions could be effective in different cases.
Posted by: Christine at Oct 12, 2006 9:19:34 AM
There are two other dating/marriage problems studied by mathematicians. There is, of course, the famous stable marriage problem, solved by the Gale-Shipley algorithm (also used for the identical problem of matching med students to med schools.) It's the one that finds sets of marriages where no two people who want to switch from their current situation to being with each other.
Another problem is an optimal stopping problem. Consider a situation where one has essentially no knowledge about the distribution of people willing to marry you; it's very difficult to judge people before actually dating them or getting an offer. Also assume offers for marriage/dating come along sequentially where, once rejected, you can't go back and take an earlier offer. (Perhaps the rejected person will have found someone else, or just in general it won't work if they've been rejected or dumped before.)
It's well-known to mathematicians that the optimal solution is to examine or entertain offers from about 1/e (about 37%) of the population, then take the next offer which is at least as good as any seen so far.
Posted by: John Thacker at Oct 12, 2006 9:32:57 AM
That solution is the one that maximizes the probability of finding the absolutely best candidate, the "soul mate."
Posted by: John Thacker at Oct 12, 2006 9:33:57 AM
I would be very frightened if I found out that many of you actually used these strategies consciously when you chose your mate.
Posted by: Matthew Cromer at Oct 12, 2006 9:41:08 AM
even if no one "uses these strategies consciously to choose a mate", we can still increase our understanding by looking at this model for behavior. no one consciously thinks about demand and supply curves when they are looking at peaches in a grocery store--but if the peaches are on sale they are still going to sell more.
Posted by: leo at Oct 12, 2006 9:55:54 AM
Christian women (IHMO) do practice the Dutch auction technique, but they lower the opening bid rather slowly (over a period of years, I've seen.)
The recent "anti-dating" trend amongst Evangelicals also argues against the English auction method. (I'm not sure how big the movement is, but it is not small. "Anti-dating" is a bit strong, too. Just not sure how to put it.)
Posted by: Klug at Oct 12, 2006 10:06:19 AM
Courtship is how the "anti-daters" put it themselves.
Posted by: nelsonal at Oct 12, 2006 12:26:47 PM
"...if bidders are risk-averse, the Dutch auction is more likely to yield higher revenue"
While not denying my own bias towards risk-aversion, wouldn't you expect nearly everyone to be at least somewhat risk-averse, and therefore to see something a Dutch Auction system prevail here, regardless of religion? While an important part of the process, nobody invests because they enjoy failure, and nobody dates (to the best of my knowledge) because they enjoy breaking up. Of course, there is also the issue of who is bidding on who in some cases. That aside, don't traditional English auctions also have a "starting bid," which is brought down if there are no takers, and then brought up again by rivals?
Klug: Being somewhat familiar with what you call the "anti-dating" trend in Evangelicals, I'd have to say that it could still be viewed in the auction framework, just as easily as more conventional dating. Candidates are still bidding and being evaluated by potential mates, the only difference (as far as I can tell) is in the methods of evaluation (which, of course, could have quite a significant effect on the final selection). The aim of "non-dating" is still to evaluate a potential mate for potential signals of lifelong compatibility, or lack thereof, but the methods (as a general rule) involve significantly less one-on-one time and physical interaction (broadly defined) than conventional dating. I've also seen "non-dating" with nearly no dissimilarities to dating proper, but undertaken by persons with an aversion to the term "dating."
Posted by: D.Cous. at Oct 12, 2006 12:36:03 PM
Definitely seen more of the Dutch Auction type behavior among Christian women. Couldn't you argue that it's built-in? There's a huge hang-up on being monogamous and divorce is a huge failure (at this point, many believe that you only get one chance at marriage--"no seconds" can be justified in the good book).
Posted by: Chi at Oct 12, 2006 12:49:12 PM
Based on personal observation (and experience), I'd agree with Dr. Cowen. Most strongly Christian women I know have very high standards for conduct and character, which they do not lower, but may tend to become more open on other margins until "someone bites". However, I think many of them would complain that no one is biting.
For the most part, the Christian dating scene is much much more like a Dutch auction (lower rates of dating while looking for the perfect match) than an English auction (dating prolifically until you find someone good). This of course leads to much complaining in the churches amongst the singles. I used to lead a men's Bible study when I lived in Orlando and many of them who were new Christians used to complain: "It was much easier to meet women before I became a Christian!"
There is much more that could be said on this issue, but I better stop before I get myself in trouble...
Posted by: Brian Hollar at Oct 12, 2006 1:32:30 PM
"While not denying my own bias towards risk-aversion, wouldn't you expect nearly everyone to be at least somewhat risk-averse, and therefore to see something a Dutch Auction system prevail here, regardless of religion?"
For those whose religious beliefs (or lack thereof) don't prohibit premarital sex, an English auction offers fun in the process, which the Dutch doesn't.
Posted by: Josh at Oct 12, 2006 1:46:29 PM
Umm, many "strongly Christian" women start with very different behavior and different standards, before they become Christians or before they become strongly so. As Brian Hollar says, there are many "new Christians" in those circles. IMHO, it would be difficult to disentangle the effects of religion and age.
Posted by: DK at Oct 12, 2006 3:58:30 PM
Christian dating is a subject pretty near and dear to my heart, and from what I've seen there are some substantial inefficiencies going on in the market. First, the limited monopolies of most churches (most churches I've been to have had a handful of singles scattered across their memberships of whom any new single might only find a few potential dating partners). Second are age related effects, granted this was somewhat overstated by where I was for my early 20s but at most churches there was a large lack of 20 somethings both single and married (it seems like many people wander and return with a family). Finally, everyone on both sides has very high standards and is very concerned about leading anyone on if they don't meet those standards. Any game theorists want to come up with something more complex than a prisoner's dilemna?
It's odd that such a suboptimal situation has persisted as long as it has.
Posted by: nelsonal at Oct 12, 2006 5:00:39 PM
"It's well-known to mathematicians that the optimal solution is to examine or entertain offers from about 1/e (about 37%) of the population, then take the next offer which is at least as good as any seen so far."
Unless you live in a really small town, even 37% of a relatively small subpopulation means an awful lot of dating.
Posted by: David at Cronaca at Oct 12, 2006 6:40:33 PM
Nelsonal: Been there, done that. Used eHarmony; just celebrated our 1st wedding anniversary. Not necessarily the perfect solution, but it's worked nicely for us.
Posted by: Klug at Oct 12, 2006 9:59:48 PM
re: 1/e optimal solution.
Obviously that scneario assumes no cost to entertain the next offer. The time cost aside, when my local 4 star becomes free I'll consider dating 37% of the local female population.
Actually, now I'm curious about that scenario. Of course it has another unrealistic assumption, that you have absolutely no prior knowledge about the set of possibilities. But that aside if you introduce a small cost to entertain an offer, where is the optimal solution? Surely it moves much closer to the front, but does it just move to the first offer no matter how good or bad?
That would certainly explain why the ones who seem the most clueless about women are the ones who always seem to get hooked by the first dog that can get their claws dug in.
Posted by: BillWallace at Oct 13, 2006 2:00:56 AM
But there's clearly some wisdom in sampling until you have a reasonable picture of the distribution, whether you can massage the situation into a nice mathematical model or not. And that's embedded into conventional wisdom on dating and relationships, right? Marrying your highschool sweetheart is rare for a good reason--usually, if you've only dated people in highschool, you don't have much sense of what else is out there, and you may be making a bad decision in the sense of marrying someone with little in common with you.
Rules of engagement in dating probably affect this only in limited ways. If you're not willing to have premarital sex, or at least come rather close, you're not going to discover sexual compatibility issues. If you spend all your time together either in bars or having sex, you probably won't find out whether you share a lot of underlying beliefs, or other interests. If you date for a short time, you probably won't see each other in a wide variety of circumstances that might be important for a marriage--how well does he handle it when you're up to your eyebrows in work and can't find time to do anything together for a couple weeks?
Posted by: albatross at Oct 13, 2006 8:41:49 AM
A variation on the Dutch auction is the "dual Dutch auction," which can be
described as being a "Dutch auction with bundling." A known example is a fish
auction that occurs in Taipei, Taiwan. The auctioneer announces a price. Holds
up a basket and begins to add roughly identical fish. The auction concludes when
someone indicates a willingness to buy. To be clear, the price is for all the
contents of the basket.
This kind of auction has been reported and analyzed in a paper by Vincent P.
Crawford and Ping-Sing Kuo, "A dual Dutch auction in Taipei: the choice of
numeraire and auction form in multi-object auctions with bundling," Journal of
Economic Behavior and Organization, August 2003, vol. 51, no. 4, pp. 427-442.
However, I do not know how this would work or not with "Christian women"...
Posted by: Barkley Rosser at Oct 13, 2006 2:52:09 PM
Barkley: For some reason, having never heard of it, I find the idea of a "dual Dutch auction" rather fascinating. I rather suspect that women in most cultures (perhaps all in which they have legal status) would not be terribly enticed by the idea of bundling here, but the world does continue to amaze.
Posted by: d.cous. at Oct 13, 2006 4:50:13 PM
This is all very entertaining, but an auction is a transaction in which there is a clearly defined seller setting the terms, and a set of buyers who choose to participate or not. Tyler's post, and apparently all the commenters, implicitly or explicitly make the assumption that the sellers are the females and the buyers are the males. If we are going to analyze dating economically, it seems more reasonable to treat a persons participation in dating as a set of pairwise, mutually negotiated, barter transactions, in which different parties will place different values on any particular participants offering. It may not have the simplicity of an auction model, but it doesn't make the dubious (and need I say, sexist) assumption that dating is as asymmetric a transaction as buying a loaf of bread at a supermarket.
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