Since it’s almost Valentine’s Day, let’s see what economists would say.
Valentine’s Economics
As economists, we know that sometimes a graph says it all, especially when it displays the impossible:
Perhaps game theory can explain the “winning move” on Valentine’s Day:
Or maybe “overthinking” a gift can take us to a Prisoners Dilemma:
Then, to a Valentine, we can display the unlikelihood of increasing marginal utility:
And, as economists, we could not resist citing the incentives that Valentine’s economics would certainly include:
Then, through The Economist’s “cost-of-loving” index, we would check prices and discover that Shanghai is most pricey for dinner but wine would be most expensive in Bahrain, Abu Dhabi, or Los Angeles:
And finally, never forgetting comparative advantage, economists could remind us of the U.S. Colombia Free Trade Agreement. Explaining why we buy so many roses from Colombia, David Ricardo would say that their growers have a lower opportunity cost than the United States:
Our Bottom Line
To everyone, from econlife, we send this Sierpinshi Valentine:
And remembering Adam Smith, we cannot resist ending today with the wish of a nudge from a loving invisible hand.
My sources and more: Always, I thank Liz Fosslien and xkcd for their clever approaches to Valentine’s economics. From there, The Economist and Pew Research told us more while Cato had the roses data, here and here. And last year, we had more economics rhymes.
