Economic Wisdom to Apply in Your Twenties

Chapter 69

Chapter 8 Section 9 Does the most perfect love always end in tragedy
In "Romeo and Juliet", one of Shakespeare's four major tragedies, Romeo and Juliet can only be together for a hundred years with God.

Jack in "Titanic" can only bury his love for Rose along with his own body forever in the cold seabed of the Atlantic Ocean below 2500 meters.

Liang Shanbo and Zhu Yingtai are so in love with each other, they can only turn into a pair of butterflies at last, and finally get married.

The love between Lin Daiyu and Jia Baoyu finally ended with Daiyu's death. After marrying Baochai, Baoyu appeared to be in harmony with God, and finally became a monk and passed away.

……

People often like to use poignant beauty to describe love. Indeed, there are only a very few happy endings, how many are unsatisfactory, and how many can only be recalled.

For human beings, love is an eternal topic, especially young people in their twenties, who are always full of expectations and yearning for love, but why do we Did you find that beautiful love always ends in tragedy?

Why can't people who love each other stay together for life?If an economist is asked to interpret the tragedy of love, he will tell you an economic term: Giffen goods.

British statistician Robert Giffen first discovered that when a famine occurred in Ireland in 1845, the price of potatoes rose, but the demand for potatoes increased instead.This phenomenon was known as the "Giffen problem" at the time.British economist Marshall discussed this issue in detail in his famous book "Principles of Economics", and mentioned Robert Giffen's views in his analysis, thus making the term "Giffen commodity" handed down.

A Giffen good is a good for which an increase in price leads to an increase in quantity demanded.According to the law of demand, the quantity of goods or services purchased by consumers generally increases (decreases) with the price, and the market demand will decrease (increase).The characteristics shown by Giffen commodities are obviously contrary to the normal situation of general commodities.

This situation often occurs in low-end commodities such as potatoes.An increase in the price of potatoes makes consumers poorer, and the income effect makes consumers want to buy less meat and more potatoes.At the same time, as potatoes become more expensive relative to meat, the substitution effect makes consumers want to buy more meat and fewer potatoes.However, in this particular case, the income effect is so large that it outweighs the substitution effect.As a result, consumers responded by buying less meat and more potatoes.

Similar to Irish potatoes, poignant love has become a "Giffen commodity" in love because it can satisfy both a very low substitution effect and a very high income effect.

In Liang Shanbo's mind, Zhu Yingtai is absolutely irreplaceable, no amount of gold, silver and treasure can replace his true love for Zhu Yingtai, so Zhu Yingtai's substitution effect in Liang Shanbo's heart is extremely weak; Seeing that Liang Shanbo was willing to leave the famous and rich family and elope with Zhu Yingtai, it can be seen that Zhu Yingtai occupied his infinite income, obviously the income effect is extremely high.The more the families of both parties prevent them, the more difficult it is for them to be together, and the higher the price of Zhu Yingtai for Liang Shanbo.But Liang Shanbo not only did not weaken his love for Zhu Yingtai, but instead aroused him to a stronger love force, obviously the demand increased instead.When the resistance imposed on them by their two families is getting bigger and bigger, Liang Shanbo can only exchange all his income, that is, his life, for the most beautiful love he needs, and Zhu Yingtai also agrees. The same, so they finally chose to exchange their lives for the eternity of love. The same tragedy also happened to Romeo and Juliet. Western psychologists simply define this phenomenon as the "Romeo and Juliet effect". 
So, is there a way to prevent the tragedy from happening again?

Economists suggest that to avoid the tragedy of "Giffen Dilemma" in love, one is to try not to pursue the so-called "perfect love". Perfect things often have to pay an expensive price; People who prevent the continuation of a sincere love, if you are out of good intentions, then you have to know that your strong obstruction will only increase the mutual price of the lovers, and your obstruction will only make them pay a higher cost, even life.

Wisdom Pieces: "Effects" in Economics

1. Substitution effect: A change in the nominal price of a commodity, resulting in the substitution of the commodity with other commodities in the commodity combination purchased by consumers.

2. Income effect: Under the condition of constant nominal income, the change in the total amount of goods purchased by consumers is caused by the change in the actual income of consumers due to the change in the nominal price of a commodity.

3. Romeo and Juliet Effect: Psychologist Deskaul and others found that in the scientific research on love, within a certain range, parents or elders interfere with the feelings of children, the deeper the love between young people.That is to say, if there is an external force that interferes with the love relationship between the lovers, the emotions of the lovers will be stronger and the relationship will become stronger.This phenomenon is called the Romeo and Juliet effect.

(End of this chapter)