The less we value a woman, the more she diminishes us!
M. Zhvanetsky
Modern economic theory uses the term “adverse selection.” This phenomenon occurs when the service provider faces a decline in the quality and desirability of consumers, despite active efforts to counteract this process, and the very attempts to combat it only exacerbate the issue.
For example, among the clients of an insurance company, there will always be those who have a higher risk propensity than the average client, and, importantly, they will be aware of it. This could refer to drivers who frequently get into accidents, drivers who spend a lot of time on the road, or, conversely, beginners. In any case, the demand for insurance in this consumer group is always higher.
The insurance company is unable to account for absolutely all parameters when setting insurance rates. It doesn’t know everything about its clients, which is why it averages the price of insurance. As a result, those who drive carefully and infrequently become disinterested in insurance, as they see no benefit in it. The insurance company experiences increasing losses—now policies are sold to those who are more likely to get into accidents. The insurance company starts raising prices, and another segment of clients opts out of insurance because the cost has exceeded the risk they perceive. Once again, the company incurs losses and raises prices again. Theoretically, equilibrium is unattainable. Practically, all insurers navigate this slippery and dangerous playing field.
A similar situation is observed with banks – the higher the interest rates on loans, the larger the share of borrowers who don’t even think about repaying their loans. It has long been noted that banks are willing to lend to those who actually don’t need the money. A banker’s dream is a creditworthy client who owns expensive real estate and has a stable, high income. But, excuse me, why would they need a loan then?
An insurance joke that insurers love plays on the idea of insuring concrete slabs at the bottom of the ocean against fire. Before insuring a property, insurers will make sure that a fire in the insured building is virtually impossible: there are no wooden or paper items stored inside, no open flames, the wiring is well insulated, the house is equipped with an alarm system and automatic fire suppression, and the fire station is located in the next block.
The situation is further complicated by the fact that service providers in the market are not alone; they operate alongside competitors. For instance, one could remove the clause from auto insurance policies that excludes coverage for incidents related to the driver’s alcohol intoxication. However, the company would then find itself with a portfolio consisting solely of policies sold to alcoholics, as they would have nowhere else to get insured. It often reaches absurd levels where, in highly competitive insurance markets, companies refuse clients who approach them “off the street,” rather than being referred by agents or brokers. Their reasoning is: “If a client is shopping around for insurance and has come to us, it means they have been turned down multiple times for reasons they are trying to hide from us.” London underwriters also won’t sign an insurance policy if a broker hasn’t been able to find an underwriter on the first or second attempt. A third underwriter simply won’t consider a risk that has already been rejected by others.
Similar phenomena can be observed in almost any market. People will clean their car interiors at a special service not once a week, but when the interior has been soiled by children. The more advertising promotes the possibilities of deep cleaning, the more complex and expensive cases will come in for service. Those who plan to overindulge will choose to vacation at an all-inclusive hotel, and an increase in hotel prices will attract even more people looking to save on food while eating a lot. Therefore, all-inclusive hotels rarely offer free alcohol. If a supermarket offers discounts to attract new customers, it will mainly draw in people looking for cheaper options rather than future loyal clients.
Now let’s take a look at the sexual market and see the same thing. Men and women, instinctively guided by an ingrained heuristic, will diligently avoid potential partners who are too eager and pushy. It’s like banks that turn away borrowers who are in desperate need of money. The more persistent and intrusive a potential partner is, the quicker you need to make a getaway. After all, anti-selection applies here as well.
Why did this partner choose you? Maybe everyone else turned him down, and he just has no one left around. But why did they refuse? And what about that woman, she’s well over 30 and not married? Why? And this man, he’s also not married? A sketchy type. Why does he need me? Can’t he live without me? Meanwhile, I’m actually looking for support myself, not planning to be someone else’s crutch. She’s in love and swears her love? Sure, she wants my apartment and car. Oh, she doesn’t need them? So, it turns out she’s not a self-sufficient person. How can you raise children with someone like that? And why is she pursuing me specifically? Am I her last chance? Maybe she’s crazy or, worse, foolish? Would a smart and balanced person humiliate themselves like that?
If you want to capture the attention of a potential partner, the worst thing you can do is to come on too strong. If you want your partner to take a step towards you, the worst thing you can do is to let them know how in love and how much you are suffering. At the very least, they won’t be in a hurry to reciprocate – they know you are waiting for them. At most, they might think twice, as the alarm bells in their mind have already started ringing.