Monday, June 29, 2009

Economics of Friendships and Relationships

I went to a friends marriage the other day. I look forward to such functions as I see them as opportunities to touch base with lot of friends at the same time without a lot of effort. Of course it is also one of the social obligations that is expected from me as a constituent of the society. Not that I meet all social obligations but this, I try to do normally. Lot of friends turn up and a far greater number don't. Now why would some turn up while others don't?

Simple question right? It is however a very profound question and it is probably not possible to answer this question 100% objectively. I am still trying to figure out some of the different aspects of this puzzle. This discussion is only meant to be a place where I am jotting down some of the thoughts related to this topic.

The simple answer to that question is that some could not turn up because they had some other engagement that same day. OK that brings to the fore the aspect of priorities. Some could not turn up because they had tasks that had higher priorities than the marriage. If they had to come for the marriage they would not have been able to meet these other schedules. Now missing an engagement is a cost that the person could not bear for the sake of coming and attending the wedding.

I didn't bring actual monetary economics into the picture. You could bring that also. Some might not attend the function because it would be monetarily too expensive for them to bear. So the cost could be comprised of a sum of all these other different factors - personal commitments, official commitments, family commitments, monetary aspect etc. So it can be stated that the person who did not attend the wedding did not do so because he was not willing to bear the cost of attending the function.

Objectively looking at it, coming to a wedding does not serve any real purpose. Even if you skip it nothing is going to matter as long as there is the priest (or whoever is the registering authority) the bride and the groom. But the example of a wedding can be replaced with other scenarios where the person who is requesting for something or requesting to get something done actually benefits by the presence or action of the person.

I am interested in looking at three classes of relationships here - a) Friendship - a class which is not really bound by any formal social obligations or expectations b) Family - a class which is bound by lot of formal social obligations and expectations c) Others - some bound and some not bound based on the origin of the relationship.

Now look at people as building blocks of a complex system called the society. Each of these people will be connected with their neighbors in the system through relationships. The relationship could be classified as friendships, family relationships and or other relationships (geographical, professional etc). If you look at life of each individual it can be considered a set of tasks that they perform. There are some tasks that people expect/request/demand from other people in the society. Whether or not they perform such tasks would depend on the above cost that we have discussed.

One of the parameters that affect the decision making is obviously the relationship between the two people. A person might travel 2000 miles by flight to attend his sisters marriage but probably wouldn't do that for his friend's sisters marriage. The decision as to whether one performs a task is nothing but a check against a costing function where the relationship is a parameter. The task will be performed if the cost of the task is below a certain threshold decided by the above hypothetical function.

Given that all other parameters for this costing function remains the same the decision about performing the task would therefore depend on the relationship. If we extend this reasoning we can theoretically find limits of the cost above which a person would not perform a given task given a relationship. Or in other words you can put a value to a relationship in the contexts of tasks/actions expected of you.

Unless there is a task involved the relationships wouldn't matter. Only a task would bring in the aspect of the costing involved in performing the task. The final decision on whether or not to do the task would indicate the cost/weight of the relationship in the context of that task.

Now that I have brought in the concept of costing for relationships let me bring in another aspect. Given such a task where you can theoretically find the threshold costs for different people above which you wouldn't perform the task, you could actually sort these people in an order defined by this costing. What we have here is a relationship index given the task. The index could vary with the actual task in question but given a task you could have an index.

The reasoning does not really put absolute values to relationships independent of tasks but gives a mechanism to sort and classify relationships based on the decision making of individuals regarding the tasks that they were expected/requested to perform. Theoretically if you track the decision making of a group of individuals across a long period of time you should be able to make a decision making matrix which can be used to predict the decisions that individuals in the group will make for tasks expected/requested of each other.

Disgusting is it? Well think about it. I can easily bring out worst case scenarios to prove my point. You might easily give a tenner to friend in need. Would you do that with 10 times that amount, what about a million times that amount? What about giving all you have for your friend? Oh would you? What about dying to save your friend? Did I find a limit here.

Not that I have to, there would be people who would actually be willing to die for their friends. For them, their own death itself would not have been a sufficiently high cost to not perform the action. My point is just that there would be limits. Because even in such cases as people willing to die for their friends they probably wouldn't be willing to do that for everybody they know.

I have brought up some interesting questions/issues here. What is the cost of friendship? What is the limit of the cost you are willing to bear for a friend? What is the limit of the loss you are willing to bear for a friend? What are the corresponding limits for your friends? Based on these costs who would you call a friend? What about a relationship? How close is a close relationship with a given individual?

I had wanted to write about this topic for quite a long time. It is touchy because people would not find it appropriate to say aloud the thoughts that I have discussed here. People unconsciously make decisions based on some of the principles mentioned above but would consider it very cold hearted or materialistic - the above discussion. I would simply call it rationlistic or rather mechinistic because it determines how the complex machinery of human society grinds and moves forward.

Click here to read the rest of this article - "Economics of Friendships and Relationships"