For someone like me, economics is everywhere, if only you know where and how to look. Where is “economics” when it comes to Valentine’s Day? Here are some of the less romantic suggestions:

Some economists have tried to model “marriage” as joint production functions, implicitly modeling a marriage as a “firm” that “produces” things like “household services.” 

For example, in our household, I mow the grass because I am physically larger and can push the lawnmower up the hill. My wife, because she is a surgeon and has standards for cleanliness far beyond my own, cleans and organizes a large swath of the house. But is it accurate to say that we “trade” these “services” with one another? If so, I’m sure both of us would like to revisit the terms of this agreement we never struck.

Other economists (including Lloyd Shapely, co-recipient of the 2012 Nobel Prize in Economics) have modeled marriage as a matching game. With some caveats and assumptions, they proved that there will always exist a stable set of marriages. This work serves as the basis of the algorithms that popular dating apps have been using for years. Though, as anyone in a relationship will attest, the work of finding a match and keeping one are two very different tasks.

These models aren’t wrong, exactly, but they feel somewhat… incomplete. “Hey baby, what do you say you and I… specialize in certain aspects of household production and trade services with one another?” That probably won’t win you many dates. Despite my best efforts, I have yet to win an argument with my wife by appealing to comparative advantage.

Instead, what I want to offer here are insights from economics that might help everyone, regardless of their relationship status, in some way, shape, or form today. To do so, I’m going to explain the economic concepts of signaling and thinking at the margin.

Signaling 101

Suppose that there is someone that you fancy. You want to convey this to them, and you are an economist. Since you are an economist, the obvious answer is cash, right?

Wrong.

Cash is impersonal. It reveals nothing about your feelings to the other person because anyone could give them cash. To demonstrate your commitment, what you need is something that is costly for you in a way that money alone isn’t. The cost has to be personal and demonstrate that you have invested time, attention, and effort that can’t be faked. 

High school students use clever and endearing prom proposals, and pop culture is replete with examples of boombox serenades and flash mob dance performances. These are tremendously costly, requiring hours of practice and coordination, and they are not guaranteed to work. 

Herein lies the rub: the signal cannot just be costly for the sender to send, it must also be valuable for the recipient to receive. (I promise you that if I tried to tell my wife how much I love her with a public dance and song routine, she would absolutely walk away from me.)

This is why giving someone their favorite flowers (especially if they’re difficult to find) is a better gift than just any flowers or, worse, cash. With each increase of commitment and personalization, the gift says things like, “I was paying attention, so I know what you like,” or, “I went out of my way to get it for you!” These signals are almost impossible to fake, which is exactly what makes them valuable.

People reveal what they want all the time. But it takes effort to listen and pick up on the cues that they give. The best romantic gestures aren’t necessarily expensive. They’re attentive.

Thinking at the Margin

What exactly is “the margin?” For all its emphasis, economics is remarkably unclear on this. To my knowledge, all we’ve ever really said on the matter is that “the margin” is basically just “the next unit” or, if we’re being really thorough, “the next decision.”

Let’s start with a simple thought experiment. Suppose there are two people that you would like to go on dates with and who would like to go on dates with you. Let’s call them Pat and Devin. Your expected marginal utility for dates with them is as follows:

(Remember, this hypothetical is about dates, not relationships.)

Based on the utility amounts in the table, if you are utility maximizing, you should make your decision only based on the next available date. So, go on three dates with Pat, then go on two dates with Devin, then back to Pat for two dates… you get the idea. If we think at “the margin,” and assume that Pat and Devin are also utility maximizing, we can quickly see how someone might “date around.”

When you’re casually dating, the margin is “the next date,” which could be a single evening. But when you find the right person, something shifts. The margins stops being “the next date,” the time horizon gets longer. Eventually, the margin becomes “the rest of your life.” You’re no longer asking, “should I go on one more date with this person,” but “Do I want to build a life with them?”

Looking at the table again through the lens of a potential “life partner,” it’s clear that Pat is the better choice. The total utility of a life with Pat exceeds that of a life with Devin. But you’d never see that if you only ever thought of one date at a time.

Being Lovely

Economics gets a bad rap as “the dismal science.” Based on the first, simplest examples I offered above, you might think some of this is deserved. Phrases like “joint production function” and “expected marginal utility” aren’t doing us any favors on Valentine’s Day. But the economist who started it all had something to say about love.

Before he wrote Wealth of Nations, Adam Smith was already well known for his book on moral philosophy, The Theory of Moral Sentiments. In that first book, Smith argued that we don’t just want to be loved, we want to be lovely. What’s more, we want to be worthy of being loved.

The distinction here matters. Being loved is something that happens to you. Being lovely is something that you do. It requires effort, attention, and a genuine concern for the well-being of others, which is exactly the kind of costly, hard-to-fake investment that makes a signal credible.

This Valentine’s Day, whether you’re in a relationship, hoping to start one, or just showing care to the people in your life that matter to you, the economics is simple. Pay attention to the people you love, not in the abstract sense but specifically. Show them, through effort and attention, that you were listening. And commit not just to loving someone but to being worthy of their love in return.

In short: love, and be lovely.

Happy Valentine’s Day.