Monday, June 2, 2008

June/ Chapter 4: Game Theory

As explained before, women are attracted to guys with more earning power. This has basically created gender imbalances in most major cities in the developed world. This is because unskilled male workers that can't compete tend to stay in the countryside, whilst unskilled women will be willing to move to work in cities to take up unskilled jobs. In the top 44 out of 47 developed countries this is the case for combined city populations in each country, more women than men...

In the city of New York for 2006 between the ages of 20-34 there were 860,000 men and 910,000 women.

In Hong Kong for 2006, between the ages of 25-34 there were 462,000 men, and 592,000 women.

Basically, men that can't compete would rather stay in rural areas than be at a disadvantage in a city. Whilst consciously or not, women skilled and unskilled have decided they would rather compete for scarce, but wealthier males than move to the countryside where males are poorer and more plentiful. How many of you girls have considered going to Shenzhen to find a guy? Many HK guys on the other hand are willing to find wives in mainland China.

Now the numbers for HK are slightly distorted by the number of foreign domestic helpers that work in HK, most of whom are female. But you can't count them out of the dating scene either, because I personally know of a few expat guys with preferences for those girls. Ok, so what does that bode for women? Surely a 1.3 to 1 ratio is not that bad right? Well, not if you apply economics to it....

If you've studied psychology, economics, political science or philosophy then you would know what game theory is. It's basically an attempt to mathematically capture behaviour in strategic situations. Let's assume we have a game where there are 100 guys in a room, and 130 girls. The rules are simple. You each get $50, but you need to find a partner who also has $50 to agree to team up with you to leave the room and split the money. You get 5 min to find a partner. If you don't find a partner within the 5 min, you lose the $50 altogether. Everytime a couple leaves the room, a new guy and girl enter the room, and everytime a girl that can't find a partner leaves the room, a new girl will come in. So there's always 100 guys and 130 girls.

You know what will happen in this situation? Soon the girls will have to undercut each other a lot to get a guy to team up with them. Whilst the guys are quite happy to shop for the girl willing to give them $40 or even $45 to leave the room together. Within a couple of hours new girls and guys entering the room will probably come into the room where a guy can walk out with $99 and the girl gets $1, and then every 5 min 30 girls drop out because they think the game is boring and can't be bothered to negotiate for less than $1.

It's basically a situation of very inelastic demand. What that means if you haven't studied economics is that if something is in high demand then prices need to change a lot for supply and demand to match. We're seeing it now in oil prices because that is an essential commodity.

Now in the real world, girls probably won't undercut each other to that degree, but what the scenario shows is that it gives guys a lot more bargaining power, and girls little room to negotiate. A girl on an earlier note I wrote a long time ago said the ratio of single men to women in HK must be 1:3. Which just isn't true according to stats, or even if you look around in LKF. But what's happened is a gender imbalance of just 1:1.3 creates a distortion that feels like 1:3. Hence why guys aren't willing to settle down and quite happy to play around till much later in life.

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