Dear Economist

Delegating the marriage decision

Dear Economist,
For cultural reasons I am probably going to have an arranged marriage. This will mean that I won’t have an opportunity to cohabit first to find out how well things would work. I would have to take a decision that is more rational than emotional. There are a lot of things that I would like in a woman, but hardly anyone has it all. What can you advise?
Josh Gopal, by e-mail

Dear Josh,

When we elect members of parliament, we are the “principals” and they are the “agents” who, supposedly, represent us. Similarly, when shareholders elect a board of directors to maximise shareholder value, the directors are their agents. Those directors will hire managers to do their bidding; again, the managers are the agents.

Think for a moment: are principals ever happy with what their agents get up to? You can understand why economists speak of something called the “principal-agent problem”.

Your parents are acting as your agents in this case, as they scout out a limited field of possible wives. How are you to encourage them to see your point of view?

The best way forward is probably to pay them by results. Perhaps your parents should post a bond of £100,000, to be repaid at the rate of £5,000 a year plus interest as long as you and your beloved remain hitched. If you and your wife end up divorced, you keep the remaining money.

Of course, your parents may be asking themselves what is in it for them. You may find that you are the one who has to post the performance bond, and will get your money back only if they choose poorly. Your parents will also fret that you will connive a divorce just to lay your hands on the cash. Nobody said this was going to be easy.

Also published at ft.com.

26th of November, 2005Dear Economist • Comments off