The Economics of Sex

Photo credit: Lending Memo, via FlickrMegan Fanning discusses whether sex is an anomaly within market structure or whether it really can comply with the laws of supply and demand. It would be easy to say that yes, men and women fit into a conforming market structure and that it is easy to measure the equilibrium between two people. However, humans are never that simple. One of the greatest assumptions that economics students will learn from day one in secondary school is that humans are rational consumers. This isn't true, especially when it comes to sex. There has been a lot of research conducted on the economics of sex, a lot of it very contradictory. One theory is that sexual relationships are based on game theory; a tit-for-tat structure, if you want to call it that. It's a game that features two players, whether that’s a man and a woman, a woman and a woman or a man and a man, but it doesn’t matter as long as there are two players. The belief is that the actions of one player will be met with the same response from the other player, a mirror image. If one player acts aggressively towards the other, then the other will begin to act aggressively too, triggering a stalemate. If both players work in cohesion together then they will succeed more quickly. Therefore, the actions of each player influence and are reflected in the other player, i.e. it takes two to tango. Another theory in the economics of sex is that sex complies with the law of supply and demand: that women represent the supply curve and men represent demand. The theory is based on the stereotype that in society today, men are shown to want sex more than commitment and women are the opposite. But is this just the social stigma or does it hold true? The main concept is that the woman is the gatekeeper of sex, that she only gives up sex when a man has met her price, and that he is the supply curve. The men are price-takers in the sex market because they supposedly demand it more, whereas women are price-takers in the commitment market with the currency believed to be sex. There’s a belief that the more a woman gives sex away too easily, the more she drives down her “value". This entire belief of sex complying with the law of demand and supply shames women for enjoying sex. It promotes the idea that sex is non-renewable and finite, that the more partners a woman has the less likely she is to get commitment from a man, if that's what she wants. Yes, this is the structure of a normal perfectly competitive market. However, we cannot just believe that human beings are homogenous products. Each individual in the market has different preferences, different wants and different needs and they cannot be categorised together under one curve. Another problem, probably the biggest issue with the above theory, is that it represents women as commodities who are willing to sell their body for a price, for example, a dinner, gifts, or the promise of commitment. This completely ignores sexual preferences or the fact that not all women want commitment. We cannot compare the economics of sex to any market structure because it is too complex, it is not a business transaction. If anything, it is more akin to bartering trade. When people enter the dating market, they have certain preferences, they are looking for certain characteristics – a certain sense of humour, a certain look, a certain intelligence. This has to be exchanged carefully and it cannot just be conducted as a transaction. Unfortunately, bartering is incredibly inefficient; it is very difficult to find that one product that has everything you need, or in this case one person. We are not homogenous products: we are unique individuals whose preferences and demand cannot just be labelled and we are too complex to just be represented on a graph. The economics of sex is a very new area currently being explored in the field of economics. Too few universities incorporate it into classes even though it is an incredible anomaly in economics – the fact that there is no structure to the product, that the consumer and the supplies each have their own preferences, that there is no price-taking. It is a unique market that is largely based on game theory and behavioural economics and is not based on men being the demand curve and women being the supply curve. There is much more to it than that. The popular theories present today are working off a traditional basis and haven’t yet adapted to the almost hyper-sexualised society in which we live today, the fact that both men and women want commitment and sex, that we can have just one or both; there doesn’t need to be a business transaction involved.