The cost of love: Solving the gift anomaly

Abstract

Friendship‐and‐love affords bonding that satisfies what can be called “transcendental preferences”—in contradistinction of “substantive preferences” afforded by, for example, food, clothes, and shelter. Substantive preferences involve ordinary “substantive cost,” whereas transcendental preferences involve “bonding cost” that includes heartaches, obsession, and emotional turmoil. What about the cost of gifts such as flowers, time, and other carriers of friendship‐and‐love? The greater is the expenditure on gifts, the greater the bonding cost. This paper investigates the following question: How should we model bonding cost, which includes the cost of gift, in relation to substantive cost? Given bonding cost and substantive cost share the same budget, neoclassical economists treat them as commensurable and, hence, transcendental and substantive preferences make up a unidimensional objective function. This treatment, however, originates the “gift anomaly”: If people easily substitute between the two genera of preferences, why do they consider the demand of payments for visiting their grandmothers—or payments for voting and sexual intercourse—as repugnant (taboo)? To solve the gift anomaly, this paper is critical of the standard economist's entry point. This paper proposes bonding and substantive costs as incommensurable and, corollary, transcendental and substantive preferences as incommensurable as well. This paper further shows how, without undermining the incommensurability thesis, the incommensurability is up to a limit: the two genera of costs and, corollary, the two genera of preferences are still linked via the income effect—as opposed to the substitution effect.

Refined tastes, coarse tastes: Solving the stratification-of-goods enigma

“…Elsewhere (Khalil, 2000(Khalil, , 2004a, I have conflated the aspirational goal motive, which is ultimately behind the rise of the Stratification-of-Goods phenomenon, with the gift phenomenon. The latter phenomenon is at the core of friendship-andlove, i.e., at the center of the incommensurability anomaly as defined here and detailed in another paper (Khalil, 2023). 7.…”

“…The longing for friendship-and-love does not necessarily involve the time dimension. It is rather about merging the self with the selves of others, which also can be modeled via rational choice theory (Khalil, 2023).…”

“…This paper focuses on the barrier that arises from goal-aspiration, which occasions status-conscious pattern of consumption, i.e., Stratification-of-Goods Enigma. This differs from the barrier that makes it repugnant or taboo to substitute friendship with substantive goods-such as reminding people of the cost of a birthday gift or the cost of a donated kidney (see Khalil, 2023). 5 To make the difference between the two barriers clear, this paper uses the term "incompatibility" of preferences regarding status-laden preferences.…”

Does Friendship Stem from Altruism? Adam Smith and the Distinction between Love-based and Interest-based Preferences

“…One may translate the Ciceronian concept as "necessary association"-suggesting that the association is interest-based, aimed to satisfy substantive needs. Indeed, Smith (1976, p. 222) uses the term "necessary association" to denote groupings that are based on mutual interest, as is the case with common defense, that differs from mutual sympathy, the pure form of friendship-and-love (see Khalil, 2021c).…”

“…31-31, 38-40). As detailed elsewhere (Khalil, 2021c), these chapters are relevant to Smith's views on love, and specifically the cost of excessive love. However, they are not directly relevant to the primary research question.…”