The world's funniest economics stories

Chapter 34 Happiness is not built with money (1)——
Marriage Economics

1. Why toads can always eat swan meat - first mover advantage
Suppose there are two outstanding boys, named A and B.They jointly pursue a very beautiful girl C.Because boy B knows that he is not as handsome as boy A, and his economic strength is not as good as A, so B's pursuit of girl C is particularly fierce.What about A?Although he also likes girl C very much, but because of his face, and because of his strong strength, he seems to be more reserved and restrained in pursuing her.

In fact, girl C faces A and B, and she likes A more in her heart.However, due to information asymmetry, A's pursuit is not as enthusiastic as B's, and the information conveyed is naturally not as fond of C as B seems to be.After thinking about it, girl C felt that it was impossible for her to actively pursue A.So, when she gave A many opportunities and still couldn't confirm the other party's friendship for her, she was finally chased by boy B.

In love, many boys with very good conditions have a sense of superiority, thinking that they don't need to pursue a girl violently and hard.Therefore, when they hesitated, the "toad" whose conditions were worse than theirs took advantage of it and won the beauty.

In life, we often hear the sayings that "a good man does not have a good wife" and "a flower is stuck in cow dung".In fact, to a certain extent, this reflects a phenomenon we often see: there will be a pretty girl next to a bad boy. To put it bluntly, it is a toad eating swan meat.Often, "the swan is often eaten by a toad", because many beautiful girls often have a mediocre boyfriend by their side, and the girlfriends of outstanding boys are often mediocre.Why is this?Let us first understand the concept of first mover advantage.

The first-mover advantage theory is mostly used in marketing to explain the competitive advantages of those who enter the market first compared with those who enter later in the market competition.Therefore, in the technological competition of enterprises, the first-mover advantage theory mainly explains what competitive advantages can be brought to enterprises by prioritizing research and development and applying new technologies.

In the previous story, boy A and boy B faced the same opportunity to pursue girl C. A chose to wait implicitly because of his own sense of superiority, while boy B seized the opportunity and entered the "competitive market" first. ", occupying an absolute advantage.Relying on the favorable terrain developed by himself, B has been taking the initiative to attack uninterruptedly.It can be said that in the struggle for this relationship, boy B, who is slightly inferior to A in all aspects, has been following the first-mover advantage theory.In the end, this kind of initiative gave it the joy of success in the competition.

For girl C, who has good qualifications, she meets two suitors A and B at the same time within a period of time. Due to the asymmetry of information, that is, girl C does not have comprehensive information on the two suitors. Therefore, among these suitors, the success rate of the most active and active one is much higher than that of the passive one.

Late-moving advantage, also known as second-moving advantage, late-moving advantage, and first-moving disadvantage, refers to the competitive advantage that late entrants do not have compared to first-moving companies because they enter the industry later than the first-moving companies compared to the first-entering companies in the industry. Observe the actions and effects of the first movers to reduce the uncertainties they face and take corresponding actions to gain more market share.For example: R&D cost advantages, industry risk control advantages, etc.In the economic field, there are market entry sequence advantages, including first-mover advantage and last-mover advantage.

2. Female Ph.D. Becomes Extinction Master--The Marginal Effect Diminishing
Krylov of Russia wrote a fable "Demian's Soup".This fable tells that there is a man named Jamian who is very good at making delicious fish soup, and he has always been proud of it.Once, a friend came to visit him, and he made delicious fresh fish soup for him.The author's description of the soup is "floating with a layer of oil, like amber", filled with "sturgeon fillets and offal".

The friend drank a bowl very happily, and when the friend just put down the fish soup, Jamian brought the second bowl.The friend chatted with him while drinking, and soon, the second bowl was also eaten.To show his enthusiasm, Jamie Young served a third bowl.My friend really didn't want to drink it anymore, but couldn't bear his enthusiasm, so he finally finished it reluctantly.When he saw that Jamian brought out another bowl of fish soup, his friend was completely frightened.He found an excuse to leave in a hurry, and never dared to visit Jamie Yang's house again.

Why did Jamian's delicious fish soup, which he warmly entertained his guests, end up making his friends afraid to visit his house again?This involves what we call marginal effects.Just like drinking water when we are thirsty, when we are extremely thirsty and we need water very much, drinking the first glass of water is the most urgent and most enjoyable.But as your thirst level decreases, your desire to drink a glass of water will also continue to decrease.And when you are not thirsty at all, if you continue to drink, you will feel more and more uncomfortable.The same is true for the fresh fish soup. The first bowl is fresh and delicious, but the second bowl is enough. By the third bowl, the guests have already resisted the fresh fish soup. If they continue to drink it, how can the guests not run away?
Diminishing marginal effect is a basic concept in economics. It means that when a person consumes a certain item continuously, as the quantity of the item consumed increases, the total effect increases accordingly, but the marginal effect of the item, that is, every time a person consumes The unit of the item, the increase in the effect it brings, tends to decrease.

There has been a widely circulated saying in various colleges and universities: "Undergraduates are Huang Rong, female masters are Li Mochou, and female doctors are Miejue Shitai." What's more, female doctors are actually separated as "the first" Three types of people".Applying the theory of diminishing marginal effects to carefully analyze the reasons for this phenomenon, we can find many problems.

I remember that Fang Hongjian’s father once said in "Fortress Besieged": "A woman is the most difficult to control after studying a few books. A man must be higher than her, otherwise he cannot be an equal match with her. Therefore, college graduates can only marry middle school girls, and foreign students marry As a college student, if a woman studies abroad and obtains a doctorate, only foreigners dare to marry her, otherwise the man must at least have a double doctorate."

It is precisely because of the influence of some deep-rooted concepts in traditional Chinese society that many people's views on mate selection are still unavoidably "male superiority and female inferiority".Therefore, the female doctor in the eyes of many people has become a very weird object.Therefore, many female doctors have no choice but to accept blind dates arranged by relatives and friends in the choice of men's "second best".When female doctors who no longer had illusions about marriage began to specialize in their studies, people put a hat on their heads as "Master of Extinction".

Similarly, looking at the status of marriage and love from the perspective of marginal effects, the rule followed is nothing more than that every time love consumption is increased, the increased part of the total effect will be gradually reduced.Therefore, the first love is the most satisfying and the most enlightening.As the number of loves increases, the curiosity and freshness of love will gradually decrease, and the love satisfaction obtained will also decrease.This is why people are very impressed with their first love.Because the unforgettable value of the first relationship is the highest.

Marginal cost, in economics and finance, marginal cost refers to the increment to the total cost of each unit of newly produced product [or purchased product].This concept states that the cost per unit of product is related to the total product volume.For example, the cost of producing just one car is enormous, while the cost of producing the 101st is much lower, and the cost of producing the 10000th is even lower [because of economies of scale].However, considering opportunity cost, marginal cost may increase as production volume increases.When producing a new car, the materials used may have better uses, so try to use the least material to produce the most cars, so as to increase the marginal income.

3. Behind the Failure of Campus Love--Imperfect Competitive Market
Ping Helan was a classmate in college.From the military training when they entered the freshman year, they began to like each other in contact.With the matchmaking of their roommates, the two finally got together in their sophomore year.

The self-study room, basketball court, reading room, studio, it seems that every corner of the campus has left their figures in pairs.In the eyes of the classmates, they are a pair appointed by God.It seems that everyone is wishing them well, and may their lovers finally get married.

Time passed by bit by bit. After taking the graduation group photo, everyone went to their respective jobs.Everything is still as peaceful as yesterday, and unexpectedly, Ping Helan's love also ended quietly in this tranquility.

In the new environment, constantly facing new challenges and getting in touch with new people, things, and things, Ping Helan's concept has also changed.Lan felt that if she proceeded from reality, perhaps Ping and her were not suitable...

It is said that autumn is a harvest season, but Pinghelan parted ways accompanied by the falling leaves in late autumn.

Imperfectly Competitive Markets are those markets where perfect competition cannot be maintained because there is at least one buyer [or seller] large enough to influence the market price, and thus faces a downward-sloping demand [or supply] curve.Including various incomplete factors, such as complete monopoly, oligopoly or monopolistic competition.

The imperfect competition market is relative to the perfect competition market. Except for the perfect competition market, all the markets with more or less certain monopoly factors are called imperfect competition markets.They are perfect monopoly market, oligopoly market and monopolistic competition market.Among them, the complete monopoly market has the highest degree of monopoly, the oligopoly market is in the middle, and the monopoly competition market is the lowest.

Going back to the previous story, Ping Helan's perfect holding hands on campus to parting ways after leaving the campus is just verifying the theory of imperfect competition.The survey shows that the campus "love market" lacks fierce competition, there are few substitutes, and the choices faced by the pursued are greatly reduced. In theory, there will be no "optimal" choice results.

College students fall in love, and the proportion of both parties breaking up is very high.More failures are reflected in "graduation means breaking up".Why is love so fragile once the two parties leave the campus?

First of all, college students' love has a strong attempt plot, to a considerable extent, it is to make up for the regrets that they missed in middle school.Because middle school is forbidden to fall in love.Love in college, on the one hand, is more mature physically and psychologically.On the other hand, it is to make up for what was originally lost.

Secondly, let us not forget that there are serious barriers to entry in the "love market" on university campuses, and the players in "trading" or games are highly differentiated in terms of appearance, talent, wealth, and future. Therefore, campus love is not a It is not a market of perfect competition, but a market of imperfect competition with a high degree of monopoly, which is its fundamental characteristic.

Obviously, those players with better endowment and wealth have certain "market power".In liberal arts universities with relatively more beautiful female resources, the market is close to monopolistic competition; while in those science and engineering universities with very few female resources, the market is close to complete monopoly.

Considering the "trying" tendency of people in love, they generally do not introduce wealth, fame, etc. into the objective function, so the most likely state of love should be: under imperfect competition, a tentative love will not allow both parties to gain their own The most satisfying love will not achieve lasting love, but due to the uniqueness of the objective function, campus love can often safely pass through a few years in college.As for the two parties after graduation, that is the inevitable result of our assumptions and deduction. Once the tentative goal-oriented college love encounters more serious constraints-geographical distribution, household registration, etc., the two parties will immediately go their separate ways.

A perfectly competitive market, also known as a purely competitive market, refers to a market structure in which competition is sufficient without any hindrance or interference.In this type of market, there are a large number of buyers and sellers, buyers and sellers are price recipients, resources can flow freely, the market is completely regulated by the "invisible hand", and the government does not make any intervention in the market, it only plays the role of maintaining society. The role of stability and defense against foreign aggression is only the role of "night watchman".

A free market means that the flow of money and goods is carried out entirely according to the owner's individual self-will.A free market economy is an economic system based on this principle.

A free market is a market that is not subject to government intervention and regulation, and the government only performs minimum functions for it, such as maintaining the legal system and protecting property rights.In a free market, property rights are freely exchanged at a price satisfactory to both buyers and sellers.Buyer and seller did not coerce each other, neither using threats of violence or fraudulent means, nor were the transactions enforced by a third party.Furthermore, in a free market, prices are determined by buying and selling based on supply and demand, not coercion.

4. Long-distance love - transaction costs
The relationship between Jing and Yuan has always been a model for friends around them.A friend who likes to joke said that the love between the two of them was "fired" by the phone.

Jing, who is young and beautiful, has been working in a hospital in Wuhan after graduating from graduate school. There are always many suitors around her. During this year, she met Yuan Yuan who works in Shanghai through friends.The two people who are very destined have established a romantic relationship a week later.After that, except for the two meeting in Shanghai during holidays, at other times, they can only use the phone to maintain their relationship and convey what they want to say to each other.

In this way, two people who do not live in the same city chose the hardest long-distance love for this beautiful relationship.On the basis of mutual trust, in 2008, they had been in love for many years and finally ended their long-distance love race and moved towards the palace of marriage.

Transaction cost, also known as transaction cost, was proposed by Coase, a Nobel laureate in economics. The fundamental point of transaction cost theory is to explain the nature of enterprises.Due to the professional division of labor of enterprises in the economic system and the operation of the market price function, there is a phenomenon of professional division of labor; however, the cost of using the market price function is relatively high, forming an enterprise mechanism, which is an organization formed by human pursuit of economic benefits .Since transaction costs generally refer to all costs formed to facilitate transactions, it is difficult to define and list them clearly, and different transactions often involve different types of transaction costs.

When it comes to long-distance love, everyone has a different opinion.Some people say that love is like being together, or staying together forever. If the two places are separated, the relationship will fade after a long time.Others say that if the two feelings last for a long time, how can they be in the same day and night.But in any case, compared with close love, long-distance love does have higher transaction costs.For example, in the previous story, Jing Heyuan's travel expenses and phone bills are the costs they pay to maintain this love.

Jing and Yuan's love finally came to fruition, which is very enviable to outsiders, but the hard work they have put in for this relationship, people who have not personally experienced it, I am afraid it is difficult to feel it.Some people say that distance does not necessarily produce beauty.Sometimes, the distance is there, but the beauty is gone.It can be seen that it is not easy to maintain the relationship of long-distance love.

At Jing and Yuan's wedding, Jing said that it was their trust in each other that kept them going for so long.Here, the trust that Jing mentioned is the trust that promotes this relationship and can greatly reduce the cost of love. In economic terms, it is the endogenous transaction cost.

Endogenous transaction cost is a kind of transaction cost relative to exogenous transaction cost such as sending gifts for the other party.Specifically in love, it manifests as more uncertainty.For example, do you feel lonely when your lover is not around?Will the relationship fade because of the long separation time?All these risks are huge endogenous transaction costs.So, if you want to prepare for a long-distance relationship, first calculate your own transaction costs.

(End of this chapter)