Marriage Futures

After a couple announce their engagement, but before they tie the knot, talk among friends and family often turns to how long the marriage will last.  When folks are not optimistic, they may wonder if they should tell the couple.  But they usually say nothing, depriving the couple of crucial signals to reconsider.

Imagine a web site where you could start a market to bet on the duration of any upcoming or current marriage.  That is, you could buy or sell assets that pay in proportion to the number of years the marriage will last, if it begins, up to some maximum of say fifty years.  If the marriage never starts, you get your money back. 

Once it became widely known that such market prices are often available, wedding guests and the couple would probably check out the price before the wedding, coordinating everyone’s expectations about the marriage.   

Added 27Oct: You can estimate marriages here just for fun, and Ravages made a similar betting suggestion

Pride would likely induce the couple to try to push up the price estimate of their marriage duration.  Perhaps disgruntled rivals would try to push the price down.  Both would provide crucial liquidity to get the market going.  And successful couples would get a great fifty year wedding present from cashing in their bets. 

Since weddings and divorces are a matter of public record, there should be little dispute on who won these bets.  The long time scale would mean that the bets should be of assets bonds or stock index funds, which increase in value over time.  The market price would usually be somewhat lopsided, usually being closer to zero than to the maximum time, which might bias the price up a bit, but that doesn’t seem a big problem.

These markets could create incentives for outsiders to hurt the marriage, such as causing or spreading rumors about cheating.  But my guess is that the suspicion of hidden powers out there trying to hurt the marriage would on average tie the couple to each other all the stronger. 

If the cost of setting up these markets became low, people might set them up for couples they know who are not yet engaged, as a way to encouraging such couples to consider (or reject) engagement.  Overall marriage futures could provide quite socially valuable advice on such important decisions.  In the US, however, gambling laws would prevent cash versions of these markets.

From a conversation with Steven Landsburg. 

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  • http://zbooks.blogspot.com Zubon

    Robin, we love you because you think these thoughts.

  • tsonevski

    Good idea to provide couples with incentives to overcome difficulties in a marriage, which otherwise would lead to a divorce. One thing stays unclear — would couples be able to bet on the duration of their own marriage. The moral hazard issue involved in the case is much stronger argument about the failure of the model than gambling laws in the US. It will be interesting to hear your thoughts on that, if you want to continue the debate.

  • anonymous

    How many people would be informed enough to trade in the market? My guess is that at this scale a prediction market would yield no advantage over informal social mechanisms.

  • http://web.mit.edu/sjordan/www/ Stephen

    John Gottman would make a killing.

  • http://profile.typekey.com/robinhanson/ Robin Hanson

    Anonymous, my suspicion is that informal mechanisms keep people too quiet.

    Tson, I’d let the couple decide up front when they would be allowed to participate. But I doubt anyone is going to destroy their marriage to win a few hundred dollars.

  • http://zbooks.blogspot.com Zubon

    At the margin, there must be at least a few couples for whom a few hundred dollars would be a large enough final straw to divorce. One can argue if the world is a better place for those marriages.

  • Silas

    Robin_Hanson and Zubon: A few hundred dollars may be insufficient to justify sabotaging one’s own, genuine marriage. However, what if

    a) they bet such that they’d get a lot more than a few hundred?

    and/or

    b) the marriage is created solely for the purpose of making money this way, and was all for show and never intended to be a “real” marriage?

    I suppose a) could be mitigated by having the couple disclose how much of their own funds they’ve committed to a (third-party) wedding planner, and allow people to compare that value to the total value of bets on the marriage. b) has a built in social disincentive in that you’re knowingly scamming people close to you, but may not be enough esp. for celebrity marriages.

  • http://byrneseyeview.com Byrne

    Silas: I’d be surprised if anyone a) got away with that more than once, or b) lost money on it more than once. You’re acting as if people don’t learn from their mistakes or get a reputation for dishonesty.

  • Silas

    Byrne: Actually, I’m not acting as if people don’t learn from their mistakes or get a reputation for dishonesty. I noted that it would have social consequences: “b) has a built in social disincentive in that you’re knowingly scamming people close to you”. I never claimed it would work more than once for a given person, but it doesn’t have to.

    Looks like just another example of this.

  • J Thomas

    I’m not clear on the details here. The way I imagine it, you’d choose one of two types of futures. You can say “Less than 5 years” or you can say “At least 5 years”.

    Say people have bought futures, less and more than 6 months, less and more than 1 year, less and more than 2 years, less and more than 5 years. The divorce comes at year 3. Presumably the winners would be “more than 2 years” and “less than 5 years” and the others are losers. 8 futures sold, 2 winners, they make 4 times their money minus overhead?

    As time goes by, short predictions lose and the value of longer predictions rises. Is it OK to buy in late at the same price? Should prices go up with time? As the couple spends their 48th year together and all shorter predictions are void, how much is a new future on “at least 49 years” worth?

    You only win what somebody else loses. But if you can keep buying in and win, you get some of your lost bets back. If you’re the only one betting against, you can say “no more than 1 year” and then if that fails you can bet “no more than 2 years” and if that fails too you can bet “no more than 3 years” and if you ever win and get half the total bets back, you’ll break even or better — provided there are enough other bets.

    Would a couple that’s considering divorce be willing to put it off a few months to affect the market? If they know who’s bet what? I sure would.

    And would that data be public? It ought to be, otherwise you’re betting blind. If you bet “at least 5 years” and somebody else bets “at least 6 years” then you win only if the divorce comes between 5 and 6 years. You’d want to know about that sort of thing.

    I’m sure there’s a way to make it work well, but the devil is in the details.

  • http://profile.typekey.com/Ravages/ Ravages

    Woah! This is a fantastic coincidence. I’d posted on the same idea sometime in April this year, and was going to develop it into an actual paper I could submit to the matchmaking portals. My post here: Keeping the social fabric of India intact”>

    Feels good to know that I am not the only evil-minded capitalist to exploit a sacred institution.

  • http://profile.typekey.com/Ravages/ Ravages

    Er, sorry about the messed up HTML.

  • http://www.mccaughan.org.uk/g/ g

    J Thomas, I thought Robin was proposing that people trade in instruments of the following form: “pay amount X in year Y if the marriage is still going then”. They’d be freely traded, so the prices would be whatever the market made them. So the way you make money is by predicting how long the marriage will last better than others; if you expect it to be about 3 years, you can (e.g.) buy 3-year instruments cheap from people who expect it to fail sooner, or sell 4-year instruments at a premium to people who expect it to last longer.

    It sounds like you’re envisaging some sort of institution where the prices are calculated by a computer or a central bank or something; I think that’s much more complication than Robin has in mind.

  • http://profile.typekey.com/robinhanson/ Robin Hanson

    Ravages, nice to see other thinking along similar lines.

    J, try learning some more basics of prediction markets and then rereading what I said.

  • mobile

    When there are enough contracts trading, someone will be able to securitize the contracts and offer people a way to speculate on the institution of marriage itself, or the strength of marriage across different segments of society (regional sectors, religious vs. non-religious couples, etc.).

    Of course, other marriage-related investment vehicles are possible.

  • ShaunC

    An interesting idea. I think this would be useful to test the proposition that people can tell when a marriage will not work. However, as an idea for someone thinking of getting married it’s a bit of a stinker – you’re much better asking your close friends for candid advice several months before you pop the question, not after you’re already engaged.

  • http://www.belligerati.net/archives/2007/10/unusual_futures.html Belligerati

    Unusual futures markets

    Marriage Futures by http://www.overcomingbias.com discusses the value of creating betting markets in couples successfully making it to marriage….

  • http://profile.typekey.com/sentience/ Eliezer Yudkowsky

    Another use of these markets would be to buy instruments suggesting marriages to people who might not otherwise consider them. For example, a rock star, instead of having to look all over the place for a good marriage partner, might simply establish a general market in conditional instruments and wait for contracts indicating a fifty-year marriage with some person X to rise above a certain value.

    Incidentally, this comes under the heading of things I would not ask an AI for predictions about, if I had one.

  • douglas

    I have been married a long time. Suppose someone with a wager on my marriage came to me and offered money for me to get a divorce.
    Would that mean I could continue living with my wife out of wedlock (as we did before we got married)? The marginal utility of having the legal document- not so great.
    But if it means I can’t see her again (or something like that)–OUCH, I’m not sure the money would be interesting.
    This could be instuctive for the market makers.

  • Rachel

    This isn’t actually a new idea. Under Jewish law a man must promises his wife a set amount if he dies or divorces her. This is normally called the Ketubah. If she pleases the wife can sell her rights to a third party for money upfront. I don’t know if there was ever a well-functioning market in Ketubahs, but there were definitely occasional trades. Of course, 2000 years ago divorce was a lot less common than death. So it wasn’t really a marriage future so much as reverse life insurance.

  • http://n8o.r30.net/ Nato Welch

    I wouldn’t consider staying married to win a bet – in whole or in part – a good contribution to a healthy marriage. The customary wisdom that “any reason is a good reason to stay married” simply doesn’t hold. I can only imagine the complications that would result from spouses having to second guess the //real// reasons their spouses are staying in a difficult relationship.

    Furthermore, marriages are capable of having more value than as permanent relationships. Just because a marriage ends in divorce doesn’t mean it was a waste of time. Why reinforce that value?

  • John D

    “Prediction is one of the pleasures of life. Conversation would wither without it. “It won’t last. She’ll dump him in a month.” If you’re wrong, no one will call you on it, because being right or wrong isn’t really the point. The point is that you think he’s not worthy of her, and the prediction is just a way of enhancing your judgment with a pleasant prevision of doom. Unless you’re putting money on it, nothing is at stake except your reputation for wisdom in matters of the heart. If a month goes by and they’re still together, the deadline can be extended without penalty. “She’ll leave him, trust me. It’s only a matter of time.” They get married: “Funny things happen. You never know.” You still weren’t wrong. Either the marriage is a bad one—you erred in the right direction—or you got beaten by a low-probability outcome(…)”

    http://www.newyorker.com/archive/2005/12/05/051205crbo_books1

  • http://www.outstandingfamily.com Susan Denny

    What absolute rubbish! I’ve never heard of anything so utterly ridiculous. If a marriage is doomed from the beginning anyway, betting on how long it will last is a waste of time. Think of all the bad vibes you’re sending out to the couple in qiestion.
    A good example is tabloid magazines who tell us all that a celebrity marriage is in trouble. For all we know the stories in the magazines have probably contributed to the ending of the relationship.
    Concentrate on your own life rather than betting on the cessation of someone else’s relationship.

  • http://profile.typekey.com/robinhanson/ Robin Hanson

    Silas, the couple might place a limit on how much negative their position could be, to reduce concerns that they might “throw” their marriage to win bets.

    Mobile, yes derivatives created by bundling marriage assets could be interesting to trade.

    Shaun, don’t let the best be the enemy of the good.

    Eliezer, yes, if it were cheap enough to create these markets they could be used to explore possible partners.

    Rachel, interesting historical analogy.

    John, good relevant quote.

    Susan, these markets could as easily send good vibes as bad.

  • jeff gray

    Marriage futures? Psshaw! How about marriage markets?
    Herodotus (1.196)on ancient Babylonian custom.

    Once a year in each village the maidens of age to marry were collected all together into one place; while the men stood round… Then a herald offered [the girls] one by one for sale. He began with the most beautiful. When she was sold for no small sum of money, he offered for sale the…next…in beauty. All of them were sold to be wives. The richest of the Babylonians who wished to wed bid against each other for the loveliest maidens, while the humbler wife-seekers, who were indifferent about beauty, took the more homely [girls] with marriage-portions [a subsidy].

    The custom was that when the herald had [sold all of] the beautiful damsels, he should then call up the ugliest [ones] -a cripple, if there [was] one- and offer her…asking who would agree to take her [for] the smallest marriage-portion. And the man who offered to take the smallest sum had her assigned to him. The marriage-portions were furnished by the money paid for the beautiful damsels, and thus the fairer maidens portioned out the uglier. No one was allowed to give his daughter in marriage to the man of his choice…if, however, it turned out that they [man & wife] did not agree, [his] money might be paid back.

    Herodotus, The History, George Rawlinson, trans., (New York: Dutton & Co., 1862)

  • jeff gray

    and before someone sics Plutarch on me, it is only supposed ancient Babylonian custom, according to Herodotus

  • Douglas Knight

    Rachel,
    why do you say “reverse”? It sounds like standard life insurance to me.

    jeff gray,
    wow! I’ve never heard of a system that had both doweries and bride-prices. I do hear stories in which systems seem to have trouble switching from one to the other (eg, India today). I imagine the sign of the transaction has a large cost and so the market is not liquid near zero, but not so large a cost as being the only one in town with the wrong sign.

  • J Thomas

    G, you’re talking about an options market. If you don’t think a marriage will last 3 years, you sell a promise to pay, say, $5000 in 3 years if the marriage is still going then. Someone who is absolutely certain the marriage will last that long will buy that at a discount — say $4300, to account for the interest he could make on the money in 3 years if he kept it. Someone who thinks the marriage Someone who isn’t sure would pay less because he might lose his money. Of course, that isn’t the only concern. What if you go bankrupt in the meantime? What if you can’t pay when the note comes due? You might die. You might flee the country. The bet is safe if you put the money in escrow, but then you’re out your money for 3 years.

    The fair way would be that you put your money in escrow and the person who bets against you puts their money in escrow too, and then the whole sum is available to whoever wins in 3 years. And either of you could sell your side of the bet to whoever wants to buy it, for whatever price you can agree on. Then someone who’s sure the marriage will last could pay up to the whole sum discounted for inflation and such, while those who are less sure would pay less.

    And the original wagers might be at whatever odds they could agree on. If the people who put up the money agree to 3:2 odds for 3 years, one of them might put up $6000 while the other puts up only $4000.

    So there could be a series of official bets for different lengths of time. And I think it’s interesting that in a thinly-traded market there could be large inconsistencies in the prices. If the prices for a particular yes versus no trade combine to less than $10,000 discounted, one person could buy both of them and have a sure win. And that could happen with nobody noticing for a long time. More likely both sides would sell high, because the two gamblers disagree on the odds. A bet that the marriage would fail early might cost more than a bet that it would fail late, even though the odds are worse and the payout is the same, simply because nobody wanted to spend the money to make a better bet.

  • http://profile.typekey.com/robinhanson/ Robin Hanson

    J, you have not taken to heart my comment that you need to learn more of the basics here. You are struggling with issue that have been well worked out.

  • cw

    I agree with Susan; this is a bad idea. Has there ever been a case of a couple calling off a wedding because family or friends disapproved? Placing wagers against the marriage is only likely to cause bad feelings and suspicion, but it would not be likely to dissuade them from tying the knot. In fact, I think such a market might isolate the couple, who rightly would wonder which of their friends had bet against them. Would you ask a friend for advice if you suspected that he had wagered actual cash on the prospect that your marriage would collapse? Dealing with friends and family requires trust, and the market would undermine that, weakening the support structure that the new couple will need if the marriage is to succeed.

    Also, I doubt there would be enough public information available for the market to work efficiently. Marriages are fairly private affairs, that can work (or fail) on many different levels. Given the complexity of the issue, and the relatively small pool of people who would have any knowledge of the couple, I think a market is the wrong approach.

  • http://profile.typekey.com/sunshinemittens/ Scott Williams

    This is an intriguing idea on the academic level, but it ends in folly rather than purpose. As I read along, I kept expecting at any moment that you would turn the corner from symbolism to some socially beneficial application, but it never happened.

    Marriage has become more a spectator sport than a participatory one. Today, a couple goes it alone, while friends and family do nothing to ensure its success. In that aspect, we agree that the participation of the community is the key to success.

    I would submit to you that a parallel of this idea is already taking place in some marriages, and that the model can be applied to countless others not merely for short-term material benefit but for long-term societal health.

    Wise friends and family would go beyond discussing the matter among themselves to encouraging – even expecting – the couple to seek pre-marriage counseling. A pre-marriage inventory tool often brings out the very concerns that the friends and family might have felt or even expressed, but this time from an objective professional. The professional can then lead the couple to examine and address these potential weaknesses (as well as the potential strengths) revealed through the inventory.

    Should the couple choose to marry, they should plan their ceremony with purpose. It requires a paradigm shift that considers invitees to the ceremony not merely as guests to be fed at a reception, but as investors in their marriage. Some savvy couples are choosing to include in their ceremony a voluntary covenant signing, giving all those in attendance the opportunity to sign on as witnesses and as those who hold them accountable to their vows.

    There will always be pressure on a marriage from both inside and out that will contribute to its strengthening or weakening. The goal is to maximize the positive forces (again, both inside and out) and minimize the negative. While the outcome might not be as tangible as market prices, the benefits of a good marriage far outweigh any material tag that can be placed on it.

    But I have to admit that this reality never seemed so clear as it is now after your market analogy. Thank you.

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