Gendernomics: On Value Part 5

This is the 5th and final part of a 5 part essay. Part 1, Part 2, Part 3, Part 4

My reason behind writing this essay was to demonstrate the many factors  that goes into determining a person’s sexual market value, and why one will never be able to create an iron-clad framework to ensure 100% success rate. While some argue that economics is perhaps not the ideal system to apply to the mating market, due to the irrational nature of human mating decisions, I do not consider human mating decisions to be irrational. In my view, humans act in the mating market as rational actors, meaning that they are goal oriented, reflective and consistent as opposed to being irrational, namely random, impulsive, conditioned or imitative [1]. For example, most people tend to have a “type” of partner that they display a preference for, which demonstrates consistency. There is a tendency for people to act in a goal oriented manner seeking out partners based on a range of characteristics such as relationship type, partner type or various others. People tend to reflect as they gain experience on which characteristics they do not want in a partner as well as which characteristics they want, which demonstrates reflective evaluation.

If partner choice was truly a case of being random, impulsive, conditioned and based on imitation, one would not expect to see many if any patterns, yet every piece of advice written on how to improve ones romantic life is based on the observation of patterns. However, one must keep in mind that rational behavior as per rational choice theory, is not the same as conscious and deliberate behavior. When an economist uses the term “The rational actor” he is not stating that people consciously sit down and compare the specifications of every single vacuum cleaner that is available to them, list out their choice criteria in a bullet point list, weigh them out, evaluate each product against the choice criteria and his budget for a new vacuum cleaner. He is stating that people evaluate their options and elect the one that is utility maximizing often subconsciously, and demonstrate a preference over time.

My goal was to elaborate on some of the underlying factors that affect such largely sub-conscious evaluations that we conduct every single day and that affect our mating behaviors. As I was writing this essay, it started to become clear that creating an iron-clad, objective system for valuation within the sexual market place is somewhat of an impossibility. While it is entirely possible to outline the major variables that will be involved on both sides in such an equation, and while it is also possible to understand the aggregate level strategies of both men and women, the interaction between variables is infinitely complex. Furthermore, the inherent limitations of rational choice theory, have been covered by authors such as Daniel Kahneman and other researchers into decision theory, and to put this in the terms Kahneman utilizes in his book “Thinking fast and Thinking slow”, a majority of mating decisions are most likely made using system 1. [2] Continue reading

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Gendernomics: On Value Part 4

This is part 4 of a 5 part essay. Part 1, Part 2, Part 3.

Valuation of Self and Others

The valuation of self is closely tied to self-awareness. One could argue that there are two extreme cases that illustrate the spectrum on which humans exist. The neurotic on one hand has an extremely depressed view of his own value, as a result of being very critical of self, whereas the narcissist has an extremely optimistic view of their own value as a result of poor self-awareness. In both cases, the person is inaccurate in their self-valuation, and suffers consequences due to this factor.

Neurotics minimize their strengths and magnify their weaknesses in their own internal perception of self.  This can lead to two broad spheres of results, on one hand one has the neurotic person who achieves great success as a result of constantly improving self, and seeking better results. On the other hand one has those neurotics that view their weaknesses as too great to overcome and as a result do not work to improve themselves. In the first of these situations, the neurotic can often become a high achiever, whereas in the latter they often fail to achieve at all. The former type of neurotic often has a large gap between their perceived value and their objective value, while the inverse is true of the latter.

Narcissists maximize their strengths and are to varying degrees ignorant of their weaknesses. This can also lead to two broad spheres of results. The narcissist that is also a high achiever and as a result of this has a smaller gap between their self-perceived value and their objective value. On the other hand the narcissist that is a non-achiever, and has a large gap between their self-perceived value and their objective value.

A common observation in the valuation of self is to what one is comparing. A person in isolation can be valued differently, than a person who is valued in contrast to another. This is similar in part to how a company has a stand-alone valuation, and a benchmark valuation, the latter being when the company’s metrics are compared with that of other comparable companies. The latter is also vulnerable to the contrast effect, where a person is viewed as more or as less due to the stature of another person or another group.

When valuing others the factors that affect valuations are much the same, except that one is working from much less information. One can compare this to “insider buys” in a stock market, where someone in an advantageous position within a company, such as a member of the executive team, or the board buys shares in the open market. This is often viewed as a positive signal to the market as it means someone with a greater degree of knowledge of the company views this time as a good time to buy. When we value ourselves, we have access to every single piece of data, when we value others we have much less.

The psychological system 1 and system 2 factors outlined by Daniel Kahneman, where one can often make rapid valuations based on available visual characteristics, that have a greater margin of error than the same valuation conducted through system 2. A ready observation of pedestalization for instance, is that such valuations have been conducted in a system 1 fashion, with little attention being paid to identify the underlying axioms and premises of such a valuation.

The characteristic of system 1 is that it trades speed for accuracy, much in the same manner that shooting from the hip does for firearms. When conducting such a valuation or superficial analysis, one must always be mindful that the probability of error increases at every level of the judgment. Not only do we have access to limited data, we will tend to value what little data we have very highly, but we lack enough to identify a pattern within the observations, our sample size is very small, and we are prone to make rapid decisions. Thus, it follows that our snap-valuations of others will be heavily biased by these factors. When the context factor is added, for instance by the person being put in a position of power, in an environment with a high volume of social proof, or other situation our valuations will increase, if the converse contexts take place, our judgment of their value will be less. Continue reading

Gendernomics: On Value Part 3

This is part 3 of a multi-part post. Part 1Part 2

Internal and External Value Multipliers

I’ve written about value multipliers previously, in “Game as a Value Multiplier“, where I define a multiplier as:

“A multiplier is a very simple concept, it’s an added variable that either serves to increase or decrease a given value. “

One of the things I think I neglected to adequately cover in that essay is the fact that a multiplier can be both positive and negative, and how it is regarded may be context dependent.

It’s quite common to make the distinction between internal factors in a company that contribute to its performance, and external factors that affect its performance. The idea of “core competencies” is perhaps the clearest formulation of how a company’s unique configuration of competencies, qualities and traits can become a source of competitive advantage. Examples would be 3M’s focus on innovation and new products, WalMart’s focus on high volume logistics, or Apples focus on high quality design work.

When applying the core competencies principle to a person the internal multipliers would be those things that alter the behavior of a given variable or set of variables based on a person’s internal characteristics. Men who write “How to vet a wife” articles often draw on such variables as a woman’s history of self control, loyalty or self-discipline, not due to these factors in and of themselves, but because the combination of these variables build a barrier towards external negative multipliers.

A woman who has a combination of love for family, traditional values and self-discipline as a core competency is according to these men a better prospect for marriage because they act as barriers for promiscuity, divorce and impulsive behavior, all of which are encouraged externally in our present social order.

External multipliers are those a person has little control over and which exist outside of that person. For instance, most are familiar with the example of going out with a wing who is shorter than you, so that you look taller by comparison. Likewise a woman may be a 10 in a small town, but a 6 in Los Angeles or Miami where beautiful women tend to congregate.

In my day job I’ve frequently utilized examples such as industry legal issues, or multi-national legal issues as an example of external negative multipliers, as these have a negative effect on the revenues of each company within an industry, yet are unrelated to the aspects of performance that a company has control over. Continue reading

Gendernomics: On Value Part 2

This essay is part 2 of a 5 part series. You can find part 1 here

Contextual Value

In various forms of business, one will often experience conflicting valuations in some form or another. In finance, it’s quite clear from the outline in an upcoming section of this post that there can be many different valuations for a company. Likewise, within marketing one can have differing valuations for a new product or a market depending on the underlying premises one utilizes when conducting an analysis. A fairly common method to establish the potential market size for a brick-and-mortar business is to determine how many people live in the area where the business will operate, then how many of those are potential customers and how frequently they will need the services offered by the company. In this simple mathematical problem, the definitions of “operating area”, “potential customers” and “frequency of service”, will greatly affect the valuation of the project.

The idea of  contextual value is that things outside of an item influence the value placed upon that item by rational actors. The most simple example is how an item for which there is high demand tends to be viewed as more valuable than an item for which there is little if any demand. Some prefer to look at demand as an indicator of value, meaning that high value products will also have a correspondingly high demand, however this is a conflation of a products’ capability for satisfying a need, with the product’s popularity. While one can easily argue that there are correlations between product quality and product popularity, the correlation between the variables are varied.

It is entirely possible to have a low quality product, for which there is high demand, or a high quality product for which there is low demand. Within the dating sphere this often takes the form of “social proof”, which as a variable influences the value of the product either up or down. However, social proof is transitory, as it is composed of variables that communicate and signal high value within a social group. Thus, many of the factors that lead to high social proof, are in and of themselves a part of the product, they are in fact the joint subjective perceptions of the product communicated externally. Continue reading

Gendernomics: The Female Bubble

tulip-maniaOpportunity costs and sunk costs have been one of the topics that I have returned to quite a few times in various essays, as I consider them central to male issues within the sexual market place. Both of these metrics exist to judge whether an allocation of resources is sound or unsound. Opportunity costs are the costs of the best opportunity foregone, exemplified by getting married, where the opportunity costs are alternative mating with one or multiple other women. The sunk costs represent the time and other resources a man has invested into a relationship with a woman, and the resources that would be loss should the man decide not to pursue a relationship with that women any longer.

I credit my twitter feed with inspiring many of my essays, and this week is no different. Last week Illimitableman tweeted the following nugget of reasoning:

If a man earns $500 an hour and you want 5 hours alpha attention to be fucked, you’re saying your pussy is worth $2500. Overpriced!” @Illimitableman

This got me thinking along the lines of my “Hookers vs Dating” calculations in an earlier post on marginal utility. It is without a doubt that in the world of constant social media validation and where women are raised to view themselves as Princesses that women develop somewhat of a tendency to value themselves very highly. This is a natural consequence of being told that your product is the best in the world and worthy of royalty. Furthermore, having this over valuation validated by a range of thirsty men from the age of 15 does not in any way encourage a sober valuation. One must keep in mind that hype and marketing can drive a low quality or even useless product to immense heights for a time, examples of this includes such fad products as the pet rock and the Dutch tulip craze.  This is one of the value theory observations that the price of a product frequently does not reflect the underlying costs of building this product.

As an example one could argue that the price of an iPhone should be:

A) The price someone is willing to pay for it in an open market.

B) Reflect the cost of building it.

These will obviously be two entirely different prices. In the Gendernomics sense, the former reflects how the sexual market operates, whereas the latter is quite inconsequential. It does not matter if a man invests massively in himself if he does so in a manner that is not market oriented. Thus, the price the woman sets for her sexual companionship reflects that of the market in which she operates, how high a price will the market accept? Continue reading

Gendernomics: Compounding Sexual Market Value

compound_interestThis post was prompted by a post by Ed Latimore entitled “30 for 30: Lessons from 30 years of life” [1], which got me thinking about how the actions and choices I made in my teens and twenties are affecting me in my thirties. Furthermore, if I could go back, what would be my primary focus for each decade, and what advice would I give to a son who just entered his teens.

Einstein is quoted as saying that the most powerful force in the Universe is compound interest. The concept can be explained in a fairly intuitive manner as earning interest on your interest year after year. What this means is that every year, the interest is added to your principal, and the amount of money you earn from interest will increase. In the short term the amount of money will seem to be minuscule, but compounding rewards those who are patient and who continue to contribute to their principal on a fixed basis.

Many retirement funds are focused on this perspective as they are accounts often started in a person’s thirties, with the goal of enjoying the results when that person retires 20 – 40 years later. Perhaps one of the things that has not been talked much about in terms of male sexual market value is how it is affected by compounding and investments that are made prior to the SMV peak. The classic SMV graph merely shows that a man’s value starts to increase in his early to mid thirties and the continues to increase as he nears his mid to late thirties. However, as I cover in the upcoming Gendernomics book  and have on this blog before as well, male SMV and female SMV are different. Female’s are born with their reproductive value “built in“, males build theirs with little of it being gifted by nature.

This means that a male who wants to realize his maximum possible sexual market value has to make contributions to it over many years prior to realizing it fully. Naturally, some men are able to realize an above average sexual market value prior to their mid-thirties. High School athletes, wealthy heirs and those who find celebrity young for instance, however, what is unique about them as examples is their attainment of the societal merit required for high SMV at an age that represents a statistical outlier. The high school quarterback attains high sexual market value early, due to demonstrating a combination of genetics, leadership ability and gaining a massive amount of social proof very early in life. In addition, his success at a competitive endeavor will translate into much increased confidence in other areas. The wealthy heir will be born into an advantageous social position, that permits him to gain experience at a faster level, for instance through travel, partaking in business deals well above his weight, and the social proof that goes with it. The celebrity, will gain the massive social proof that comes with fame, in addition to a demonstration of high ability compared to his peer group.

This essay is not written as a foolproof guide, but as a series of reflections on how one ideally should dedicate time across 3 decades of life, ages 10 – 20, 20 – 30 and 30 – 40. Continue reading

Gendernomics: The male sexual strategies

The RoninIn our early days as a species on this earth, it is likely that we largely mimicked our cousins, the other primates in our approach to mating. Might makes right without the rule of law, and therefore the first sexual strategy that evolved was the physical one. In a world that consists largely of physical trials such as hunting, it follows that evolution would select for those who had the best genetics for this life. To explore this, I decided to see what the status is among our primate cousins who are living in a much more natural state than humans. While humans have come a long way from our hunter-gatherer past, through the agricultural revolution, our mating behavior is most likely less adapted.

The three closest relatives to humans genetically speaking are Chimpanzees, Bonobos and Gorillas. In Chimpanzee society, there are two dominance hierarchies, one among males, and one among females. The male hierarchy is controlled by an alpha male, and the alpha may be the most physically dominant, but may also be the one most skilled in manipulation and gaining allies. Males gain mating opportunities through status, females gain access to resources. Females will on occasion collude to remove an alpha male in favor of a new one if they perceive that it will benefit them. [1]

Bonobos appear to be a matriarchal society, where everyone has sexual contact with everyone except mother and son. A son gains his social status from his mother. Quite unique to bonobos, females will engage in sex with many males indiscriminate of social rank or age. This results in a situation where no male can know which offspring is his and parental care rests solely on the female. [2]

Gorillas live together in groups called troops, presided over by an Alpha male Silverback (over 12 years old), and often consists of a Silverback, multiple females and the offspring. On occasion groups with multiple males can exist, where the Silverback is the Alpha and the other males are younger and serve as support for the Silverback. The troops form in order for the females to gain protection and mating opportunities. [3] Continue reading