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Lecture 4

ECN 340 Lecture Notes - Lecture 4: Demand Curve


Department
Economics
Course Code
ECN 340
Professor
Thomas Barbiero
Lecture
4

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ECN 340
Week Four
Chapter Nine: Exploitation of Affection
-In a loving relationship, one person is concerned about the welfare of the other
-Each person in the relationship is both a donor of charitable expression (gifts) and a recipient
-Each person realizes there is an unwritten social contract between the two: try to make the
other person happy
The Affection Model
-Donor of a gift receives pleasure from giving to the recipient- the less expensive the gift the
more often they will give- recall the down sloping demand curve
-If small gifts make the recipient happy, the donor will give many small gifts to constantly make
the recipient happy
-If large gifts make the recipient happy, the donor may not be able to give many gifts
-Gifts can be in the form of money, chocolate, simply listening to the other person, sexual
experience
-Gifts are given until Marginal Cost = Marginal Benefit
-But there is a possibility of exploitation
-The recipient can subtly say, give me this amount or I will take nothing (Deny pleasure of
seeing me happy)
-The recipient is taking a chance because if they ask for too much, the donor may be better
off giving nothing
-The ability of extract a larger quantity from the donor depends of the number of alternative
recipients for the gift
-The exploitation of the donor will occur only to the extent that the recipient is
unconcerned about the welfare of the donor
-If the recipient truly loves the donor, they would not expect this from them
-If the recipient cares, then any reduction in the donors welfare will be a reduction in the
recipients welfare
-Eg. Your happiness is my happiness
Romantic Relationships
-Definition: My happiness depends of the happiness of the person I love
-If I care about my spouse, they can make me do things for them that I usually wouldn't do
-But if they ask for too much, I can drop them even if I still love them
-Womens Movement has in effect made it less likely for them to be exploited- ask for too
much and she walks
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