Why do we buy overpriced food and flowers on Feb. 14? Not because of love, exactly, but verification.
After 15 years of marriage, I decided to prove that I still knew how to be romantic. So I took my wife out to dinner on Feb. 14. Which is to say, I paid the highest possible price for the lowest expected quality.
The restaurant was packed, the service strained, the kitchen overwhelmed, the bill spectacular. Our romantic episode felt mass-produced, as if affection were being pushed through Adam Smith’s pin factory. We were seated, smiled at, served, then rushed along. By the end, both of us felt slightly nauseated, though not by the food. After precious few nights out without our kids, we had willingly suspended our better judgment—only to be reminded, expensively, that there are better ways to signal how you feel.
That is what makes Valentine’s Day irresistible as an object of economic analysis. The same forces that produce traffic jams and market bubbles—congestion, imperfect information, coordination failures—are at work here too, only with candles.
Continue reading the entire piece here at the Wall Street Journal (paywall)
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Roland G. Fryer, Jr., a John A. Paulson Fellow at the Manhattan Institute, is Professor of Economics at Harvard University, an entrepreneur, and co-founder of Equal Opportunity Ventures.
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