Economics for Managers
Assignment: Economics Case Study
The Economics of Love
In your own words, summarize this article. What is the main message of this article? What is the economics of love? The article in question provides an insight into how the study of economics can be applied to the everyday concept and application love. Stein (2008), makes the point that whilst economics has been a key area of his academic life, his principal area of study has related to love. Based on the experiences of the author over a twenty year period, a series of rules that were originally developed have been further refined in this article bringing together the studies of love and economics (Stein, 2008). Each of the rules that were established relate to both real life experiences as well as key components of economic theory. One of the key assumptions here is that persons who have read Stein’s article have themselves had similar experiences that have lead them to draw similar conclusions. In any case the key themes of Stein’s rules are; -
Rule 1 Returns (i.e. in love received) are relative to the level of investment assuming that love is reciprocated (Stein, 2008). -
Rule 2 Bonds that are high in quality (i.e. individuals with quality, substance and morals) will often generate greater yield (i.e. longevity and quality in the relationship) so you should stick with them, as opposed to junk bonds that one should off-load(Stein, 2008). -
Rule 3 Stein (2008), advocates for a great deal of investigation and examination to take place prior to commitment to minimise one’s risk of loss. Stein (2008), goes on to suggest that is generally difficult to diversify in matters of love and so this necessitates the requirement to appropriately study the options. -
Rule 4 Stein (2008) suggests that in order for one’s returns to achieve their maximum levels in the long run, they need to be operating within a monopoly market (i.e. One will achieve their greatest level of love with the one long term partner equally investing). -
Rule 5 Stein (2008), suggests that that the returns in love should be equal to the costs. In considering this it might be suggested that the most efficient and/or optimal level of love is achieved when the costs and returns are equal. -
Rule 6 Stein (2008), suggests that investing for the long-term yields better results. The application of this rule can also be compared with short-run and long-run costs in that whilst one may be able to vary the quantity of labour (i.e. partners) in the short run, eventually the marginal product (i.e. love, pleasure) will decrease (McTaggart, Findlay and Parkin, 2012). However, in the long run the learning’s, or lowest achievable average costs of each product (i.e. previous partners) can be utilised to achieve efficient scales, an example might be that of constant returns to scale where costs (i.e. patience, unselfishness, etc…) are constant however the output received (i.e. reciprocated intimacy) may steadily increase (McTaggart, Findlay and Parkin, 2012). -
Rule 7 Whether in economics or love, one should be genuine in seeking out his/her opportunities. Here Stein (2008), suggests that if expected opportunities do not match the reality then growth and development would not be possible. -
Rule 8 Stein (2008), suggests that if you have found a successful match in economics or love, then hold onto it (i.e. successful partner matches and/or successful stocks are difficult to come by so cherish them).
Whilst there are many assumptions made relating to the definition of love, the economic principles assist in examining love in its many different forms and in some cases evaluate love in terms of inputs, outputs and productivity gains (Thomson, 2012). The economics of love cover the basic economic problem, where love is the scarce good (perhaps the scarcest) and the challenge is how to utilise resources most efficiently to obtain the maximum benefit possible.
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