Homo Economicus (Rational Actor Model)

Graph 7 Choice criteria and age example

The total set of female choice criteria is therefore dependent on both her preferred sexual strategy (long-term vs short-term) and which category the male in question is placed in according to his SMV. Thus, female valuation of men in the sexual market place becomes a case of both subjective and objective value theory. Provider potential is in many ways an objective measure based on resources at the man's disposal, and a projection of his future ability to obtain resources.

Short-term sexual potential is to some extent more a case of subjective value by each woman, but in aggregate they demonstrate a clustering tendency in these subjective judgements in the same way male judgement does of female attractiveness. This is often referred to as "Alpha Fucks, Beta Bucks" and females are hardwired to hold out on sex for the latter, and offer sex to the former.

This informs of female mating preferences, yet also has implications for preferred equity structures of men. A man, who has most of his equity in the form of provider ability, will rarely be able to obtain sex rapidly and with little investment whereas males who hold their equity in the form of "Alpha Equity" will be capable of doing so.

The Rational Actor and Perfect Information

The Homo Economicus is a concept used within economic theory, which assumes that people act in a rational manner within the market. At the most basic level, behavior is defined as rational if it is goal oriented, reflective and consistent across time and different choice situations. The early theorists assumed that agents make choices to maximize happiness or utility. For instance, there is nothing irrational about preferring butter to margarine the first time, but there is something irrational about preferring butter one time and margarine the next time without anything happening in between.

The rational behavior is often contrasted with behavior that is random, impulsive, conditioned or adopted by non-evaluative imitation. Much of marketing is centered on appealing to subjects in such a manner that they elect to break from the rational behavior to that which is irrational once, and then reflexively return to a new preference.

A second aspect of Homo Economicus is self-interest, where each actor pursues subjectively defined ends seeking to maximize utility as a consumer and profit as a producer. The marginal utility of a good or service is the added benefit gained from an increase in consumption or loss experienced from a decrease in consumption of a good and service. The law of diminishing marginal utility states that as you consume more units of a good or a service the marginal utility will decrease with consumption.

Profit is defined as price obtained above cost of producing or obtaining the good that is subject to trade. Therefore, accurate cost accounting is required in order to make consistently profitable decisions.

It follows from the above that when a trade between two homo economicus actors take place, each will seek to maximize both their own utility and their own profit in the trade. For instance, in the marriages of old, each family would seek to maximize their utility and realize as much profit as possible from the marriage. This puts them at odds, which ensures that a situation of optimal allocation of resources is more likely to happen.

In the modern sexual market place, homo economicus will seek to maximize the trades within the market using sexual market value as a price-proxy. However, one core concept that is required for homo economicus to perform trades is perfect information, meaning information of the total market so that he or she can make the best possible trades. Thus, a central goal of actors is to obtain information, yet the goals of other actors is to restrict information as much as possible. Each gender within the sexual market place has a stake in obfuscating information to restrict the ability of the other to make rational decisions.

By actively supporting market frictions, one party can ensure that they are holding more information and thus can make a better-informed trade than their counterpart. This realizes more value for them, but less from the other. A great example of this is the tendency for men to marry just prior to their increase to their max SMV, while women marry when theirs start to decline.

To illustrate, a man sells a watch right before it becomes the new "IT" watch, and thus appreciates rapidly. A woman sells her car after it has been driven hard and crashed a few times, yet pretends that the car is in fact of higher value because the hard driving and crashes gives it character.

In the example above, the man lacks information while the woman actively obfuscates it. The former is a case of lack of information, the latter a case of deception. The efficient market hypothesis (EMH) in the strictest formulation holds that the price of a security in a market at all times reflects all information both public and privately held about the market. Within the sexual market place, this is not the case, as the male is often unaware of his own sexual market value, or even the concept of sexual market value, while women are appear intuitively sensitive to the subject.

This places the woman in a position where she can be pragmatic about her choices and approach to the market, and leaves most men in a position where they are unaware of what is going on around them. Thus, men lack the ability to be rational actors. As mentioned earlier, the definition of rational behavior is "goal oriented, reflective and consistent across time and different choice situations."

As the male is unaware of his own motivations or goals, his behavior cannot be goal oriented. At best, it may be proxy-goal oriented. Most men tend to reflect little about their own motivations or experiences with women, negative or positive, whereas women frequently obsess about their experiences with men. Thirdly, most men utilize "she is interested in me" as their only choice criteria.

Therefore, male behavior towards females in the sexual market place cannot be argued as rational. Males are frequently uninformed as to their own SMV, and tend to estimate it downward in addition to females often revising theirs upward, which turns it into a problem of lack of information vs active misinformation. In embryo, the female perfectly aware of how the market works, seeks to mislead the male so that he is no longer a rational actor within the sexual market place.