Many say that consumers are biased to prefer the middle of three options, and to buy less when offered more options. In the latest American Economic Review, Emir Kamenica shows these need not be biases:
"Is that why women from urban areas marry less than women from rural areas? "
I wonder if the "folk wisdom" about major metropolitan areas is true - that it's harder for women to date and thus marry due to the fact that such areas attract a large number of gay men, skewing the ratios.
In Manhattan only 37% of women ever marry, compared with 61% across the USA. Since gay women are estimated to make up only 4-6% (this may be an undercount) of New York's female population, that can't account for the difference.
However, it's important to note that these effects can vary by nabe. Downtown, near the FiDi, men outnumbered women in a ratio of 126 to 100 in 2007, as male brokers & traders clustered in TriBeCa, sharing apartments to be near work.
An uninformed consumer can be better off with a smaller choice set. The logic behind this possibility is as follows. A consumer who does not know which variety she likes must choose randomly among the available varieties. In equilibrium, the most popular varieties are introduced, so the average popularity of the available varieties is decreasing in the breadth of the product line. Consequently, the uninformed consumer's expected surplus is greater when there are fewer options.
@floccina
"Is that why women from urban areas marry less than women from rural areas? "
I wonder if the "folk wisdom" about major metropolitan areas is true - that it's harder for women to date and thus marry due to the fact that such areas attract a large number of gay men, skewing the ratios.
In Manhattan only 37% of women ever marry, compared with 61% across the USA. Since gay women are estimated to make up only 4-6% (this may be an undercount) of New York's female population, that can't account for the difference.
However, it's important to note that these effects can vary by nabe. Downtown, near the FiDi, men outnumbered women in a ratio of 126 to 100 in 2007, as male brokers & traders clustered in TriBeCa, sharing apartments to be near work.
Finally, male selectivity is invariant to group size, while female selectivity is strongly increasing in group size.
Is that why women from urban areas marry less than women from rural areas?
An uninformed consumer can be better off with a smaller choice set. The logic behind this possibility is as follows. A consumer who does not know which variety she likes must choose randomly among the available varieties. In equilibrium, the most popular varieties are introduced, so the average popularity of the available varieties is decreasing in the breadth of the product line. Consequently, the uninformed consumer's expected surplus is greater when there are fewer options.
@Robin
You may recall we talked about this guy's speed dating paper in the Nov. 08 open thread.