David Henderson is not happy with Richard Thaler’s potshot against neoclassical economics.
Thaler made a typical joke about economists—that if they treated their loved ones the way their models imply they do, they would be very unloving, indeed.
Henderson digs his feet in and insists that expected utility calculations are central to evaluating a “potential romantic partner.”
You fall in love with someone. You start discussing your future. You find out that you’re a Bryan Caplan who wants 10 kids and she’s a career woman who wants $10 million. What do you do? You drop her, or she drops you. In other words, you’ve tried to get relevant information about this potential romantic partner and that information has led you to conclude that this relationship won’t work.
In another example, he explains how a specific preference that a potential partner has causes “Your estimate of the probability that this will work” to fall.
In other words, he presents us with a typical prudence-only story of how love works, going on to talk about the role of incomplete information and up-front investment costs, and so forth. Perhaps, beyond the narrow points he’s seeking to make against Thaler, he does not think that everything about love is so reducible to expected utility calculations. Keeping this possibility in mind, I’m going to respond to the version of love he actually presents in the post.
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