Arranged vs. Love Marriages

I had written about this earlier on my personal blog, but I just thought I might share the thoughts here and probably get a different perspective! BTW there are variations from the original blog. That was written when I was still wet behind my ears regarding the theory of incentives (not that I'm any wiser today).

The topic which catches my fancy today is relationships. Let me be more specific here and look at the concept of marriage from a rational perspective (married readers please excuse if this sounds kind of stupid). What has rationality got to do with marriage??? I start with the basic premise that marriage is a social contract between two parties (following social norms lets call them the husband and wife). The outcome of this contract is some metric which defines how a couple feel about the marriage ( eg. good/bad).

To make matters clear, I'm thinking of a selection problem here. For instance lets assume that there are two stages. In the first stage the decision is whether to enter into a relationship with person X or not. Depending on the choice in stage one, the outcome is determined. There are several factors which determine the outcome and since both stages are correlated, the factors that determine the outcome will also determine the choice made in stage one.

At the outset, I start with the benchmark solution that an optimal selection policy implies good quality. The question is what is the optimal choice mechanism?

The answer to this question is not simple. For instance, consider Indian families. Typically there are two approches. One is where the potential couple select themselves (love marriages). The other is when the choices are made by parents or arranged through other related parties (arranged marriages). To start with I argue that both approaches have potential costs and benefits associated with them. Therefore the optimal choice would be the one which minimizes costs (mirror problem being maximizing benefits).

Let me start with the arranged marriage mechanism. We can resort to tools from information economics to conceptualize the information problem associated with this solution. Using the standard principal agent framework we can classify the potential spouse as the pricipal who employs the services of the agent (parents) in finding his/her potential mate. The problem in this case is on account of differential information and/or misaligned interests between the principal and agent. What does this mean???

The first potential cost to the system arises in the form of differential information between the spouse to be and the parents (agents). Consider this! The groom/bride to be have the best information about their personality, expectations, mate preferences etc. In the case of a love marriage where the bride or groom find their mate themselves, there should be no information imperfection. But in the case of an arranged marriage, since we are delegating the primary choice to a third party there will always be some form of information imperfection which lead to positive agency costs. An argument against this could be that since parents take a serious role in bringing up their kid, they probably have a good sense of the tastes and preferences of their child. I will argue that to a large extent social pressures and the need for the kid to appease the elders leads to suppression of the true preferences (this is contestable). The crux of this approach is that agency costs are present due to information imperfection when one chooses the arranged marriage mechanism.

The second potential cost is the misalignment of incentives between the principal and agent. Again going back to the social system where traditionally the boy's parents tend to live with them post marriage, parents have an implicit incentive to find a daughter in law who can adapt into the family. Further it some cases the girl brings in a dowry of some sort at the time of marriage (in some communities and some parts of the country i guess). This implies that parents of the boy (who want a dowry) have an incentive to find girls who are from a wealthy family background, have good education and several other potential considerations.

Similarly there is an incentive problem from the other side also. In some cases the incentive for them would probably be to find a groom who will preferably stay with them rather than the opposite. Taking this forward, in cases where that is not possible it might be expectations of help/support in some other form. Either argument implies that again we some positive costs associated with misalignment of interests.

Now while I have tried to show that two potential sources of costs can arise from an arranged marriage mechanism, what about the other side of the spectrum? From arranged marriages lets move to love marriages. Again this is kind of a stylized setting which I think is more intuitive to understand. Basically the theory is that here the potential bride/groom self select their mate and hence the question arises as to what makes them choose between arranged and love marriages?? for instance a handsome young man, well educated and in a good job might find it far easier to select a mate by himself as against someone who is shy, not so good looking etc etc.

Therefore in the case of the second person he might be better off by going through the arranged marriage system. The point here is that the potential players know their relative strenghts and weaknesses and therefore their choice of action is purely dependent on their evaluation of the same. Therefore there is no information imperfection in that sense that since the player knows his/her preferences, he/she chooses optimally.

There is no incentive compatibility problem here because there are no third parties involved here and therefore keeping everything else constant, we can see that the self selection of the mate minimizes search costs.

A caveat which is important is that the cost of self search also depends on how much the society is willing to tolerate. However today this is less of a problem compared to say two or three decades back.

The dynamics underlying the entire system seems quite complex. Rationality and expected utility maximization behavior suggests that the quality of the marriage is probably better under the self search system since it minimizes search costs.

So are love marriages better than arranged marriages (hehehehe)????...I guess thats theory (i'm not saying you have to buy this). What is observed in practice might be quite different.

The question is then is what is missing??? or is it just futile to try and even think about this???

the rambling will continue...