Economics of Relationship

Most of us want to get into a relationship. There are many including me, who always fall in love with the person who is either committed or sees you just as a friend. That means we are the ones who always get trapped into single sided love. But at the same time there are many who don’t want to get into relationship ‘AGAIN’. The interesting point here is, population is so large that in both ends there are many people who either want or don’t want to get into relationship, depending upon their past experiences or there can be other factors like fear of family, fear of career’s success, etc. In this article I am not talking about the above mentioned single sided or dead relationships, but I will talk about relationship which are still alive. As an economist, I tried to apply some of my 12th class economics concepts to make you understand that what could be the possible reasons of not having a smooth relationship with your partner.

In economics, we have buyers (urfa consumers), sellers (urfa producers) and from these two we can generate wealth.

If we consider only demand side economics, that is only from consumers’ side we know an amazing concept called THE LAW DIMINISHING MARGINAL UTILITY (LDMU). According to LDMU, if a consumer consumes more and more units of a commodity, each additional unit gives that consumer lesser and lesser satisfaction. Now let’s apply this law in relationships. If as a lover, you are giving whatever (time, money, physical space, etc.) and whenever your partner wants something, then you are losing your value. Now think why? The reason is you are readily available for your partner, then why should he/she values you? Let’s say you are buying a new car, in initial days you will value your car more like anything. You will be going to protect it from anything that may cause damage to it. But as time passes by, the same car is not as valuable as it was in its initial days. You need to notice that you are the same person, the car is also the same,, then what is the reason of valuing the same car lesser? You know that the car is now yours and is available to you whenever you need it. Same happens in relationship, if other person knows you are always available for him/her, as days passes by you will lose your value. As he consumes (time spent) more and more unit of a commodity, every additional unit (additional time) gives consumer lesser and lesser satisfaction. And if you now notice and analyse your relationship, think of your degree of availability and then compare it with this article.

Now question arises, do we have an equilibrium in this case? So the answer is congratulations, yes we do have an equilibrium like we have in consumer behavior. But in this case, we can arrive at an equilibrium intuitively and not mathematically (yay, for all those who hate maths). You yourself need to understand what should be the degree of your availability, so that it will not only help you in saving your relation but also, allows you to maintain a balance. If you can maintain the balance between the two (availability and non-availability), you can actually live a peaceful life with your partner, who will give you more value than before. Extremes are always bad, that is, too little or too much will ruin your relationship,so, try to balance it out, and then see the magic of BALANCE MANTRA. Apki izzat apke hath.

Now let’s see producer side in economics. As you all know, we have an upward sloping supply curve. What do you mean by upward sloping supply curve? It means as price of a commodity rises, the producer is willing to supply more, because of higher profits (given the cost).

Now think like you are the seller of yourself, whom do you want to go with, the person who gives you more value or the person who gives you less value as compared to the other? Obviously a bad question, the answer is who gives you more value, right. Now my question to you is, your value is in the hands of buyer (the person you love, your partner) or is it in your hands? If you understood LDMU explanation, then you must be saying, oh wow it’s me, who is responsible for my value. Now the question arises, if you are responsible of your own value, and you know that higher value means higher profits (satisfaction in terms of relationships), then what are you waiting for? Oops are you waiting for my next question? Some people must be thinking, if product price is increasing, then after a point, profit may fall, as you can’t sell more units of commodity at higher price. Or to put in other words what should be the price (your value in case of relationship) that will maximize your profits? You know the amazing BALANCE MANTRA right? This mantra will work here too. If you want to maximize your profits, you need to set that price at which people can buy your product. But here is the twist, as the producer, you know your product value. Now you need to decide the consumers to whom you are willing to sell your products. If you want anyone can buy you, then be available all the time for everyone, as you practice this, your value starts decreasing and buyers can buy you at a very cheap price (and won’t value your existence). If you want no one can buy you, then you know the solution. So it all depends on you, what kind of product you want to be? The one with the very low value or the one with the highest value, or the weighted average of both.

Now let’s talk about equilibrium. Equilibrium is where demand and supply matches. At this point you will get the equilibrium quantity and price. In terms of relationship, your demand depends upon the value at which the consumer is willing to buy you and your supply depends on the value you want to give to yourself. If both the value matches, at that point we can say that you are in a smooth relation. If there is a disequilibrium, then you need to follow BALANCE MANTRA. And you know what, whether your relationship is smooth or not, it all depends on you. Don’t blame your partner for this, as you yourself are setting your value. I hope you all are or will be in equilibrium soon.

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