# social lemon markets

> I refuse to join any club that would have me as a member.

— Groucho Marx


Alice and Carol are walking on the sidewalk in a large city, and end up together for a while.

> "Hi, I'm Alice! What's your name?"

Carol thinks:
> If Alice is trying to meet people this way, that means she doesn't have a much better option for meeting people, which reduces my estimate of the value of knowing Alice. That makes me skeptical of this whole interaction, which reduces the value of approaching me like this, and Alice should know this, which further reduces my estimate of Alice's other social options, which makes me even less interested in meeting Alice like this.

Carol might not think all of that consciously, but that's how human social reasoning tends to work.

In most cases, Alice understands this and doesn't even try to talk with Carol in the first place.



## lemon markets

Economics has the concept of a "[lemon market](https://en.wikipedia.org/wiki/The_Market_for_Lemons)". When sellers have more information about item quality than buyers, and reputation isn't a factor, sellers will try to sell low-quality items, and consumers will respond by driving down prices until only low-quality items are worth selling.

I think a similar thing has happened for social relationships in many countries over the past several decades.

An increase in social isolation over time has been widely noted; [Bowling Alone](https://en.wikipedia.org/wiki/Bowling_Alone) was written in 2000, and the issues it described have increased since then. My view is that the above dynamic is responsible for much of that change.

What are the root causes of social relationships becoming more of a lemon market? There are many causes, but 4 causes I consider significant are listed below.


#### urbanization

In many countries, people have rapidly moved to bigger cities over the past several decades, and this affects social dynamics.

Human relationships generally have some upfront costs and then a net benefit over time. In very small towns, your chance of having a relationship with a random resident is higher, so the initial upfront costs are amortized over a higher probability of establishing a good relationship.

In a very small town, if Dave dates 3 girls at the same time and treats them all poorly, afterwards, every girl in the town will know to avoid him. Bad behavior is less attractive when random people you encounter in the future are more likely to be aware of it, and bad behavior being less likely means relationships with random people you meet have a higher expected value.


#### drugs

If you're "friends" with a heroin or fentanyl addict, and you have some money and nice stuff, they will steal your stuff to buy drugs.

The US has seen a substantial increase in the number of drug addicts and overdose deaths, first because of prescription opioids and now because of fentanyl.


#### MLM schemes

Sometimes, when someone in America seems like they're trying to make friends with you, it's actually because they want you to join some MLM scheme they're involved with, so they can make money off you. Participation in such schemes has grown over time, and they've become more aggressive.


#### screens

Suppose 2 strangers meet at a park. They could talk to each other, but that option competes with whatever they'd otherwise do. If they're both addicted to mobile games, or both listening to music, the odds of them having a conversation are low.

Visiting friends' houses and talking to them used to be one of the main things people did for fun, but television gave people entertainment that didn't require any other people.


## possible solutions

#### smaller communities

The effects of urbanization can be partly cancelled by putting people in a small community. Ideally it would select for compatible people, but even a random selection seems to work. The biggest examples of this are students making friends in high school and employees making friends with coworkers.

#### excuses for socialization

In my experience, Americans are actually eager to talk to strangers and make friends with them **if and only if** they have some good reason to be where they are and talk to those people **besides** making friends with people. If there's a situation which can attract people who don't need to be there to make friends, that's no longer a lemon market.

The biggest example of this is probably employees making friends with coworkers, but there are many other examples, such as:
- casual sports teams
- rich people meeting at expensive charity events at art galleries
- gamers meeting teammates

Video games have become more and more popular over time. The main problem with that last item is that most people who meet via video games are far away. Even if games tried to match people in the same city, very few games have enough players to make that an option. I think local LAN tournaments or cooperative challenges could be a community-building thing, to some extent, but the fragmentation of the games and TV shows and other sorts of entertainment people like has increased. 


#### software

Computers are fast. Algorithms have been developed extensively. Companies like Google and Facebook have lots of information about people. Maybe software can just match compatible people?

But...what we actually have is people swiping on Tinder. Guys lying about their height and income and swiping 1000 girls. Girls using photo filters and all going for the same few percent of guys.

OKCupid tried to algorithmically match people based on various qualities, and some people liked it a lot, but then it got bought by Match Group in 2011 (for $50 million, which isn't very much money here) which changed it to be more like Tinder.

Maybe Youtube could match single people based on the videos they liked and watched? I don't see that happening, but it seems theoretically possible.