[The following is a transcript of a radio interview, dated 14th February 2017, on the topic of Economics of Love & Marriage]*
So it has come to this… Two days to go and you are worried about your Valentine’s Day plans. You’re not quite certain what you need to plan, and how seriously you need to treat this day. After all, it is not a holiday, and you might have only been out with your partner on x number of dates (where x ∈ R). Should you do anything? How much should you spend (in terms of time, effort, money, or any combination thereof)? Continue reading “The Behavioural Economist’s Guide to Winning at Valentine’s Day”
In a famous paper written in 1982, the American economist George Akerlof argued that employers sometimes pay more than the market wage rate in the expectation that this will induce their workers to be conscientious even when they are not being monitored.
According to the theory of rational choice, this kind of trust relationship is not possible between fully rational individuals. Continue reading “Reciprocity and the Paradox of Trust in Psychological Game Theory”