Monday, November 27, 2006

Dear Economist

I just love the Financial Times!!

Natasha asks:

Dear Economist,

I have been going out with a school friend for nearly a year and I think he’s “the one” - but we are heading off to university at opposite ends of the country. Will the relationship survive? Is there anything I can do to keep it going?

Yours sincerely,

Natasha, Co. Durham

The economist replies:

Dear Natasha,

I understand your concern, but your future looks bright. A long-distance relationship will always put pressure on both of you, but it’s a question of how you use that to your advantage.

Economist Tyler Cowen, a professor at George Mason University, has pointed out that the Alchian-Allen theorem applies to any long-distance relationship.

The theorem, briefly, implies that Australians drink higher-quality Californian wine than Californians, and vice-versa, because it is only worth the transportation costs for the most expensive wine. Similarly, there is no point in travelling to see your boyfriend for a take-away Indian meal and an evening in front of the telly. To justify the trip’s fixed costs, you will require champagne, sparkling conversation and energetic sex. Insist on it.

Meanwhile, optimal- experimentation theory suggests that at this tender stage of life you are highly likely to meet someone even better. Socialise a lot while your boyfriend is not around.

Finally, consider your bargaining strength with potential new boyfriends with regard to, for instance, who pays for dinner. Your best alternative to a negotiated agreement with the new boyfriend is. your old boyfriend, who by your admission is an excellent catch.

This puts you in a sound negotiating position - unless, of course, the boy is maintaining a long-distance relationship of his own.

2 comments:

Munmun said...

Hilarous! But I think the reply from the Economist makes sense (the best way to handle long distance relationships is probably actually trying to sever it!!)

Nitin said...

The best thing about Tim Harford's columns are that they are first and foremost technically sound. That they are also amusing is what differentiates him from the rest. Even Levitt and Dubner are serious in comparison on their blog.