Who Is Paying for That?

Christina March 18, 2012 Comments Off

By Christina Hulstrand

I never met Mike, well not in person, so we decided to change that and meet for dinner. He was very hot, the conversation – not so much. As he carried on with his obtuse rhetoric I couldn’t help but to assess the trade off of dating an incredibly sexy man with limited sense. Then he put all doubts to rest. He leaned over and ever so gently touched a lock of my hair and said, “Do you have a comb? This one curl is a little tight.”

At that one moment I knew him and I would not be going on a second date. Now the question is do I tell the waitress to bring us separate checks?

Women ponder this question often (a quick Google search shows it is subject to a great deal of debate).  Should you allow him to pay, showing that you respect steady, well-established, responsible men or do you pay and establish your own independence?  Or maybe you belong to the school of thought of whoever initiated the date should foot the bill… Ah, the games… the silly little games.

There is an assumption that men will offer to pay the bill, but why? Is this just something from the past that never died? Has feminism lost in battle to the ancient art of dating rituals? Do you need to stand up proudly and declare, “I am woman. Hear me roar?”

This is a game of incomplete information. These types of games are difficult to strategize because you don’t know the motives of the other person. You have to try and gauge the “utility” (the amount of happiness,  which can include monetary, time or just plain good ‘ol feelings) the other will gain with any particular outcome. To even come close to accomplishing this there is one thing you must do.  You have to ask yourself, “What would that person do if they knew what I was thinking?”

Let’s see. What would the thought process of the typical man be?

Mike sits down at the table and he looks across thinking, she is great! I want another date with her, but does she like me? Does she want to go out again?

-I can offer to pay for her meal, but if I do and she insists that she pays her own, I’ll be miserable because the love of my life turned me down. She basically said I do not plan on going out with you again, so don’t waste your money. At least she didn’t make me pay.

-But, what if she does accept? That would be fantastic! She would have signaled that she did enjoy my company.  That would definitely let me know where I stand and I can start planning the next date… maybe I’ll get tickets to that play she mentioned earlier.

-Hold on a minute! What if I offer and she lets me pay, but really she doesn’t want to go out again? I will have wasted my money and had my hopes up thinking she did want to continue forward with date two. That would be embarrassing and a waste. Maybe I won’t offer.

-Yeah, I will just tell the waitress to bring a separate check.  Women now days are independent and don’t mind paying for their own meals.

-Oh gosh, no! What if I tell the waitress to bring a separate check, but she wanted to go out again and I blow any chance because she thinks I don’t like her. Or worse, that I am cheap!

WOW! That gave me a headache just thinking about the stress the man is under (and you thought the hour it took you to get ready was bad). It doesn’t seem like we can figure this one out, does it?

Anyone who knows me personally knows I am a huge fan of charts and graphs.  This didn’t come naturally; my parents didn’t give me pivot tables instead of toys to play with as a child. No, the love of visual symbols to represent a relationship between variables didn’t manifest until well into college. A matrix  (not the Keanu Reeves kind, sorry) is just what we need to sort out this conundrum.

A game (and therefore a matrix) needs three things in order to help us, and we just so happen to have all of them.

-First we need players: We have two, our dating couple (Mike and Christina)

-We need strategies (their set of actions). For Mike he has the strategies of offering to pay or not offering to pay. Christina has the option of accepting the offer of Mike to pay or not accepting his offer to pay (ultimately paying for her own).

-Last we need Payoffs (which are the outcomes expressed as utility gained). We learned the outcomes of Mike from his crazy dialogue above (this is what a matrix looks like).

 

        Christina’s Strategy

Mike’s Strategy

Accept Offer Don’t Accept Offer
Offer to Pay
Don’t Offer to Pay

 

Mike goes first, so he is player 1  (he is the row player).  Christina goes second so she is the column player and is player 2.  Each set of choices the player has becomes the header of their row/ column.  Now we have to put in outcomes.

 

        Christina’s Strategy

Mike’s Strategy

Scale of happiness 0-5 Accept Offer Don’t Accept Offer
Offer to Pay  5,  2,
Don’t Offer to Pay  1,  0,

 

***Don’t run away from the page yet! THIS IS NOT MATH, it’s simple notation. Let me just explain the numbers.

Mike said in his conversation (above) if he offered to pay and Christina accepted he would be very happy:  On a happiness scale of 0-5, I gave him a 5 (yes, subjective – but it’s my blog I can do what I want – unless you want more math!)

He also said if he offered and Christina rejected the offer his ego would be crushed, but happy he didn’t have to pay for her dinner… let’s give him a 2 on the happiness scale.

If he didn’t offer but than later found out she was going to accept he would be devastated that he ruined his chances (he didn’t get the girl and she thinks he’s a broke loser). He gets a 1.

He didn’t mention the scenario of him not offering and her not accepting his offer to not pay. But I think we could all agree that this would get super ugly. Both of them would give each other evil looks until one finally decides to cave and grabs the bill. I think we can all agree this is worst case scenario, and Mike gets a big fat 0.

At that one moment I knew him and I would not be going on a second date. Now the question is do I tell the waitress to bring us separate checks?

So now you’re asking yourself, “Has any of this nonsense told me who is paying for the date?”  Not yet, but you’re closer!

Without knowing anything about how Christina feels we know one thing for certain when we look at the matrix above. Mike will ALWAYS offer to pay no matter what he thinks Christina will do.

HOW DO WE KNOW THAT? (Put yourself in Mike’s Shoes)

-If he thought Christina would accept he would definitely offer to pay (Look down the column that says Christina accepts. You have a choice between a happiness factor of 5 or a 2… Mike wants the 5, so he offers).

-What if he knew Christina would NOT accept the offer? What would he rather do?  He would still rather offer to pay (the 2 is higher than the 0).

HMMM, okay, I’ll buy it. BUT, what does Christina do? Well, I promise that we will not do anything more that looks remotely like math from this point on.

Let’s pretend you have two stocks.  One of your stocks gained 10% while the other lost 5%.  You had an incident and have to liquidate one of your stocks immediately.  Which one do you pick? Go ahead, think about it, I’ll wait… If you are like most people you picked the winning stock.

 

This isn’t rational; if anything, investors should sell the “losers” in order to exploit tax reductions on capital gains. Also, if you check any investment website you’ll see that on average the stocks sold at a gain tend to outperform stocks sold at a loss.  This is called Prospect theory, but is sometimes referred to as the Disposition effect. It really depends on who you are talking to and in what context. (see below for link to learn more).

So what on earth does this have to do with Christina’s choice to accept the offer of Mike paying?

Not selling your losing stock wasn’t all about economic loss. You see, people are emotional. No one likes to “close an account on a loss.”  Our losses hurt so we try to avoid them at all cost, even to the point that it’s illogical.

If you like Mike (or whomever you go to dinner with), making him pay for dinner is a great strategy. He has made an even greater investment in you and if he is like most, he is focused on what he has to lose (the cost of dinner) instead of what he has to gain (freedom from your craziness). You have successfully raised the probability of getting another date!

What if I don’t like Mike?  Well, I would tell you it’s mean to use Mike for a free dinner, but I’m an economist, and I don’t care about Mike’s feelings. I only care about maximizing my own utility. However, your utility includes all the phone calls and stalking that may occur after you lead Mike on. This is not good and will quickly diminishing the benefit of a free meal. My suggestion: if you don’t like him, don’t make him pay, even though he is going to offer!

 

Christina, the Dating Diva, is an economics nerd,

professor of game theory and strategic heart breaker.

She’s also been spotted raking up credit cards at numerous local boutiques.

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