20 June 2014

On dating

What affects the divorce rate? Two things come to mind: the cost of divorce and match stability. Both nominal (legal fees, etc) and social costs of divorce would affect one's decision to get divorced. Arguably, lower cost is desirable. In general, we would not want people to stay married when both parties wish to leave. But why do people want to get divorced in the first place if they married under mutual agreement? There is probably some sort of information problem. For one, it is difficult to know and understand a person, especially when the person may purposefully act differently to appear more desirable.

Match may break down not only due to violation of individual rationality, but also due to a blocking pair. That is, there is problem of "cheating". Unlike the lower cost of divorce, match instability is quite certainly undesirable. It is costly to get married and then get divorced. More importantly, however, divorce after having children imposes negative externalities (of course, children themselves increase the cost of divorce so the externality is at least partially internalized; the problem isn't so much the act of divorce itself but the effect of poor parental relationships on the children).

Currently in the US and probably in many other countries, the conventional procedure to address this information gap problem is dating. People go through the process of dating to learn about the other person and to determine whether the person is acceptable as a marriage partner.

The problem with dating is that it addresses (at least partly) the individual rationality problem, but it fails to prevent a blocking pair simply because the convention dictates that you date one person at a time. Suppose A and B are dating and C comes along and shows interest in A. A suspects that C might be a better partner than B but of course is not sure. A must make a decision to either break up with B in order to start dating with C or stay with B. Of course, if A decides to break up with B but ends up not liking C, then A's chance to get back with B is slim. Thus the option of dating with (or put differently, learning about) C is highly risky. Thus the current convention discourages A-C match to form even if it blocks A-B.

Hence, rather ironically, the society's harsh punishment toward cheating leads to less stable marriages by preventing agents to explore their options. Since break up is much more costly after the marriage, one has more incentive to "explore" the options after the marriage (if you get caught cheating while dating, break up is certain; if you get caught cheating while married, divorce may or may not happen). Even more ironically, the society likely punishes infidelity to maintain the family structure, in which case "cheating" before marriage would be irrelevant.

In short, the fact that dating with multiple people simultaneously is a taboo likely result in less stable matches (in terms of marriage) which in turn results in more divorces. Since divorce puts higher social cost (notably due to externalities imposed on children) compared to break-ups before marriages, the society would benefit by shifting the equilibrium to one in which fidelity to a single partner while dating isn't asked for.