Archive for January 26th, 2011

26
Jan
11

Risk Aversion and The Grand Gesture

(Alternate Title: Why doesn’t anyone ever show up at my door with roses?)

(Other Alternate Title: Sometimes I can’t sleep. This is the outcome.)

One of the things I have discovered during the early parts of my education in finance is that I am actually learning about human behavior. This was not something I’d ever considered, but it becomes apparent when you realize that all an economist does when they formulate a model is make an attempt to create a mathematical expression that will simulate an interaction that takes place naturally among people. Finance, being in essence a special form of applied economics, often involves making assumptions about human behavior in the face of risk. As I lay somewhere in-between waking and dreaming the other night, it dawned on me that I could easily model a simple form of the choices a man faces when considering asking a woman out, and use this to show, mathematically, why we are so timid.

On the show “How I Met Your Mother”, this scene stands out as an example.

Robin: Remember that guy Ted that I was telling you about? Well, I came home and I found him waiting in my apartment with the string quartet and roses and chocolates and…
The vet: Oh, that’s so sweet.
Robin: Ok, yes, it’s sweet in theory but isn’t it also kind of crazy? I mean a string quartet in my living room, who does that?
The vet: Nobody does that.
Robin: Exactly.
The vet: No honey, nobody does that.


Why? Why are men so scared to go the extra mile and really put themselves out there? We see it in movies and on TV all the time. Some man sings in public (Ten Things I Hate…), he breaks up a wedding (Wayne’s World 2), or he fights for her honor (Back to the Future, and yes, I chose stupid examples on purpose).  The point being, the guy makes a fool of himself, but ends up with the girl, because the latent cultural belief is that the “Grand Gesture” is the pinnacle of romantic overtures. So then, why is it so rare that we ever observe it in the wild?

Continue reading ‘Risk Aversion and The Grand Gesture’




Follow

Get every new post delivered to your Inbox.