The Pareto Efficient Relationship

"Mmmm? Oh, Doug? He's a brilliant bio-chemist. He was just telling me about...." She stopped, and gave him a guilty look. "Between you and me, I haven't a clue what he does. I may have majored in biology as an undergraduate, but I passed chemistry by the skin of my teeth. I can't really follow once he starts talking about chemical reactions, and it's impossible to interrupt once he gets going. I usually ask his wife to paraphrase for me; I'll have to find her later." She sent him a teasing smile. "Why? Were you not paying attention, Professor?"

Something about her smile and the way she'd said the word professor threw him mentally off balance. "Um, no. I'm afraid not. Math is fine, but in general I stuck with the social sciences in college. Then again, I suppose many here would say I stuck with the pseudosciences." He laughed, but sobered as she nodded at him with a perplexed expression on her face.

"Rrright." Goldie surveyed him for several long moments before giving her head a little shake. "Anyway, I'm in charge of logistics for the panel. I'm hoping to load any PowerPoint presentations beforehand, so we can start on time; I hate it when panels start late. If you're using PowerPoint, could you give me your presentation on a jump drive at lunch?"

"Sure. I'll uh, I'll make sure to do that."

Goldie nodded, and then turned to join Doug and, presumably, Doug's wife across the room. For the second time in less than a day, Michael stared after her retreating back, trying to shake some sense into his head.

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Goldie was the last to speak at the afternoon panel. Michael was impressed; it was clear that the organizers had saved the best speaker for the end of the day. While he was a typical academic—dry and somewhat dull, pulling many of his sentences directly from his article—she was a firebrand. He could tell she'd based her speech on some prepared remarks or themes, but she'd managed to weave multiple nuggets from each of the four panelists that had gone before her into her speech.

Even more amazingly, she'd done it all—the tone, the words, the content, the poise—while making sense, with virtually no stutters or awkward pauses, and with no written notes in front of her. He didn't agree with everything she'd said—her policy recommendations included far too many regulations—but she was convincing. He'd even found himself nodding along to a few statements he'd normally eviscerate.

He marveled as she arrived at her closing remarks. She'd been looking around the room during her talk, no doubt gauging the audience's reactions to her words; he'd noticed that she'd returned to several key themes and catchphrases a number of times, after they'd received a favorable reception the first time around.

She had a politician's knack for words, an activist's passion, and an academic's knowledge of facts.

A smart, confident, gorgeous redhead, one who could make a Chicago economist want to increase government regulation. She was dangerous. And intriguing.

He wasn't surprised that she received thunderous applause after her closing remarks, or that a number of audience members dogged her heels as they headed towards reception room for the evening's cocktail hour.

"So, how come you aren't hanging out with the other economists?"

He turned to see Goldie standing before him with a beer in her hand. He laughed. "Well, they're environmental economists. They don't exactly like me."

"No?"

"No. I mean, we agree on most of what I presented here, of course, but, well... as you pointed out earlier, it's the entire Chicago school of economics thing. What can I say; they've heard the rumors about how we eat small children for breakfast. It's a key part of those Latin American development policies."

She stared at him, her face expressionless. He couldn't believe he'd made such a nerdy joke in front of her again. Why the hell had he done that?

He licked his lips, wondering if she would make an excuse and leave. Or if he would have to make an excuse and leave.

She didn't. Instead, she curved her lips into a smile. "For breakfast? I'd always heard you eat them alongside the cucumber sandwiches you have with your formal afternoon tea."

He sighed in relief, and gave her an apologetic smile. "No, I'm afraid you've been misinformed. That's the folks over at the LSE—the London School of Economics. We prefer ours with breakfast at Chicago. It really starts the day off right."

She smacked her palm to her forehead. "Of course. Silly me, how could I have mixed the two schools up." She paused, and gave him a mischievous smile. "Being from the University of Chicago, I assume you only consume children from countries we have free trade agreements with?"

"Absolutely. NAFTA and CAFTA have really improved our supply of low-cost, tasty children. But I'm afraid they prefer Irish children in London; they still take Swift a little too seriously over there."

He knew he was grinning like an idiot by the time she shook her head at him. "Believe it or not, I did come over to discuss food with you. Of the non-children variety, that is."

"Oh?"

"Yes. I'm going out with a few colleagues for dinner tonight. Doug and I are vegetarians—well, I'm a sort-of vegetarian—but I managed to find a restaurant that's known for their barbeque and has great veggie entrees, too. So... do you want to come with us? Or, oh... I forgot. You mentioned your sister and nephews earlier today. Are you visiting them this evening?"

A vegetarian who found him a good barbecue place? One who remembered his sister and nephews?

"I saw them last night, so I'd love to tag along." He paused, and then decided to go for broke. No use suppressing who he really was, right? After all, she'd still invited him to dinner after their children-for-breakfast discussion. "Especially if the menu includes small children livers, some fava beans, and a nice Chianti."

"Great, I think it will be a fun group." She paused. "And I can't believe you made those jokes. Jonathan Swift and Silence of the Lambs in one conversation? You're terrible. You know that, don't you?"

But she was smiling as she turned away. She shook her head from side to side as she walked across the room to catch Doug and his wife, and even glanced over her shoulder at him and bit her lip to suppress a laugh.

His idiotic grin returned. She liked his bad jokes.

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Dinner made him feel like an eighteenth-century intellectual, one whom a dazzling, mysterious woman had invited to her exclusive salon. The fact that he was a last-minute addition didn't bother him; he was flattered she'd thought to include him.

It was well past ten, and they'd since moved from the restaurant to a bar down the street from their hotel. There'd been six of them, but Doug and Elizabeth—the married bio-chemist couple from North Carolina—had left half an hour ago.

"Well, I'm beat." Anna, an engineer, drained the last of her drink and reached for her sweater. "My panel's at eight tomorrow, so I should turn in. Any of you ready to head back?"

"Yeah, I am." Clarke, a lawyer, stood. "Anna and I are on the same electrical grid panel tomorrow. Goldie, you heading back? Michael?"

"Michael still has some beer left. I'll stay and keep him company."

"Oh, you don't have to stay if you don't want to," Michael said as the other two said their goodbyes and headed towards the door.

"No. It's fine." She smiled. "Besides, I have some left, too."

"Right. So, what do you do for work? You spent most of the evening shepherding our conversation along, but never really said much about yourself or what you do."

"I work for an alternative energy non-profit. It's sort of one part think tank, one part advocacy institution, and one part resource center. Most people who work there are really specialized, but I'm one of those, 'Jack of all trades, master of none' types. I tend to be the one sent to these things."

He spluttered. "Master of none? You're quite the public speaker and debater, and you managed tonight's discussion like a true salonnière. I assumed you were a lawyer."

"Me? A lawyer? God, no. My master's is in environmental science." She surveyed him above her glass as she took a sip. "So, how long are you going to be here?"

"Today's Thursday, right? Until tomorrow afternoon. I grew up about an hour west of here in Lawrence, Kansas, and after my nephews get out of school tomorrow we're driving out to see my parents and my brother's family for the weekend. I fly back to Chicago on Sunday evening. What about you? What flight are you on?"

"Flight? Oh, no. I took the train."

He paused, his drink halfway to his mouth. "The train? You took the train from Chicago to Kansas City?"

"Yes."

He blinked several times, giving the words time to sink in. "Are you insane? That had to take... days."

She pursed her lips. The fire in her eyes, the same one he had seen when she'd first talked to him about government policy that morning, was back.

"It didn't take days. It only took about eight hours. I left after lunch, worked a half day on the train, and then read a book for the rest of the journey. It was quite pleasant, actually."

"But... why the train? The flight from Chicago is only an hour and a half, and it's cheap. Why subject yourself to eight hours on a train? That's... that's irrational, Goldie."

She put her drink down and glared at him. He was surprised to feel both a sense of foreboding and a surge of anticipation at the prospect of arguing with her.

"The U.S. should have better passenger train service, but we'll never get it unless Amtrak sees the demand. I do my part. It may seem irrational to you, but it's completely rational to me."

He barked out a laugh. It probably wasn't the best thing to do, but he couldn't help it. "That's ridiculous! The idea that one woman, riding from Chicago to Kansas City, just once, would have any impact on demand at all... statistically speaking, that's impossible. And, hold on, weren't you arguing with the front desk clerk about plug-in cars?"

"Yes. As you noted, I can argue. I was the Vermont state champion in debating, and then went on to win a national title with the Yale team. If there's one thing I'm good at, it's debating. When there's an argument to be won, my friends turn to me."

She shrugged before continuing in a clipped tone. "As for the rest, even if I don't make a difference, I have principles that guide my life. Environmental activism is more than a career. It's a lifestyle. It impacts everything from my mode of transportation to my meals, where I live, what I buy... everything."

He raised an eyebrow. "Is that so?"

"Yes."

"What about the rest of us? Don't you think I have principles that guide my life?"

She shrugged again. She didn't seem annoyed, but she seemed deflated, and almost disappointed in him. "I don't know. Do you?"

He smiled. "Yes, and like you, they're directly linked to my career. I'm an economist. I model human and institutional behavior to help us understand the world around us. I use economic theories to analyze every situation I find myself in, and act accordingly. Travel behavior, my meals, where I live, what I buy... everything"

She raised an eyebrow at him.

"Don't believe me? Okay then. Um... I'm deeply suspicious of potlucks, cookie swaps, or any sort of meal sharing that occurs in a restaurant if the bill isn't being split down the middle."

She laughed, but then stopped and stared at him. "You're serious?"

"Of course I'm serious. Think about it. A rational individual will bring a cheap, easy-to-prepare dish to a potluck. They'll hope to benefit from other people's well-prepared dishes while exerting little effort or money themselves, but won't be surprised if they don't. It's the same thing with cookie exchanges, or at restaurants. They all present classic 'moral hazard' situations. And heaven help you if you've included too many economists in the mix. Chances are we've all thought things through. It's the simplest game theory problem there is."

"Oh my God. I can't believe you just admitted that."

"Why? I expect everyone to behave rationally, and I behave accordingly; I'm rational actor. If you want a more optimal outcome, you have to restructure the rules. Again, it's simple game theory. What's so wrong with that?"

"You call that rational? That's... that's childish, Michael. I mean, here I am talking about riding the train to save on excess carbon emissions and you're talking about cookie swaps because you don't want cheap sugar cookies." He opened his mouth to clarify—she hadn't understood his point about restructuring the rules for a more optimal outcome, at all—but she pressed on. "What else?"

"Uh... let's see. I just explained the concepts of conditional and unconditional cash transfers to my nephews. One nephew wanted a skateboard for his birthday; the other didn't know what he wanted. So I gave one a skateboard, and the other a check for less than the value of the skateboard."

"You can't be serious." She covered her mouth with her hand, trying to hide her laughter. "That's terrible, Michael. Really, really terrible. You say you're their favorite?"

"Why is it terrible? Gifts aren't about money. They're about happiness. Economists have shown, time and again, that an unrestricted cash transfer gives an individual a higher level of happiness—well, utility—than a restricted transfer does. So if I want my nephews to be equally happy, I give the one who wants cash an amount that is less than the value of the good I give to the other." He paused at the look of horror on her face. "I can draw the graph for you, if you'd like. I'm not lying, or trying to be a bad uncle."

"Um, no thanks. Part of me wants to stop here—you're getting weirder by the minute—but I kind of want to know more." She grinned, and that twinkle was back in her eye.

"Well, I conduct cost-benefit analyses when faced with various decisions; it's how I ended up flying and not, you know, taking the train, which, while cheaper, has a huge opportunity cost associated with the excess time. Um, let's see... there should be a division of labor within a family or between friends based on specialization; that's a good one."

He paused, trying to think. It was hard when she had such an incredulous smile on her face. "I don't know." He laughed. "More of the usual, I guess."

"The usual, right." She took another sip from her drink. "So tell me, Professor, do these rules of yours apply to relationships?"

He stared at her. She'd taken the subject onto a new course, and something in her tone had changed, too. It was subtle, but she was more... flirtatious? And why had she called him Professor? She'd done that earlier, and he hadn't quite understood it then, either.

"Yeah, I suppose they can apply to relationships."

"Oh? Do explain."

"Well, if there's a disagreement, you can conduct a cost-benefit analysis of the various outcomes. You'd consider how much option X benefits person A and costs person B, versus how much option Y benefits person B and costs person A. It's more complicated than that in a relationship, of course; even when you win, you internalize a cost from seeing your partner upset, and sometimes when you lose, you win in a strange sort of way from the benefit of seeing your partner so happy. Those twists have to be factored into the analysis. But that's one way of thinking about decisions in a relationship. It's a straightforward application of a fairly typical analysis."

"Typical. Of course. I always solve relationship problems with a spreadsheet."

He pressed on in a mock serious voice. "And of course, relationships have to be Pareto efficient."

"Come again?"

"They have to be Pareto efficient."

"I'm afraid I don't know that one." She grinned. "I must have dozed off that day, Professor."

"Shall we go back to Econ 101, then?" Heaven help him, but he was actually getting used to her calling him Professor. "Pareto efficiency occurs when a system's goods or resources are allocated among individuals in such a way that no other allocation could make an individual better off without making another individual worse off. I suppose that a relationship could—and should—be structured in such a way that achieves the maximum possible happiness for both people; if not, aspects of the relationship can be restructured, but only if the restructuring doesn't make one person worse off. If this restructuring makes one person happier without decreasing the other's happiness, then we say a Pareto improvement has occurred. You could apply this line of thinking to all sorts of aspects of a relationship."

"I see." Her lips quirked. "Like sex? Do you have Pareto efficient sex, Professor?"

He let out a short laugh, and felt himself blush. Part of him thought he must be imagining her asking about his sex life. He didn't think he'd ever talked about sex with the women he'd dated. They'd just, well, done it. He looked down into his drink; he'd only consumed half a beer since dinner. Maybe he wasn't imagining things?

"Um, well, I suppose so. I haven't really thought about it before, but if a certain sex act makes one person better off, without leaving the other worse off, then yeah, it can be part of a Pareto efficient relationship. Actually, if it's a new sex act for the couple, it would be equivalent to a new good or resource entering the economic system. Just as a new good expands the Pareto frontier via a Pareto improvement in economic theory, the new sex act could bring the relationship to a new and better level."

"I see. And I suppose we have to include mental health here when evaluating a sex act. Because some sex acts can definitely leave one person physically worse off, at least in the short term, but leave that same person much, much happier than they were before the sex act."

He blinked. Were they talking about what he thought they were talking about?

"Yeah. I guess so."

"I see." She paused. "So, Professor, do you want to debate economic theory some more?"

It should have been an innocent question, but it wasn't; her tone had been anything but innocent. She may as well have said, so, Professor, do you want to fuck me? Part of him thought that had been what she'd asked.

Michael stared at her, watching as a mischievous, teasing grin spread across her face.

"What? Don't tell me your past lovers never called you Professor?"

"Um... well, I can't say they did." His lips quirked. "Most of them were professors, too. Or when I was younger, graduate students destined to be professors. And, well, professor is kind of a nerdy term."

"And you're hot, in a nerdy kind of way."

He laughed. He couldn't remember anyone telling him that he was hot, but nerdy? That was familiar.

"Are you going to tell me I'm like Duckie from Pretty in Pink, or Farmer Ted from The Breakfast Club? I got that a lot growing up."

She smiled. "You know, I did always think that Andie should've ended up with Duckie in Pretty in Pink; Blaine—I think that was his name—was such a prick. And Farmer Ted in The Breakfast Club... borderline rapist, now that I think about it. But no, you don't remind me of Duckie, or Farmer Ted, or any other nerds from Brat Pack movies. You remind me of Indiana Jones."

He choked on a sip of his beer at her last comment. "Indiana Jones? You're joking, right? Perhaps I should tell you now that I've always been a terrible shot, I'm afraid of heights, and I've never owned a fedora." He paused. "Though I am afraid of snakes. We do have that in common, I guess. But really, I'm just a professor."

"Exactly, a professor." That mischievous, teasing grin of hers—the one that made his heart pound a bit harder—returned. "Don't you remember the beginning of Raiders of the Lost Ark, when Indy's in his tweed and the female student in the front row blinks her eyes at him, and has "LOVE" and "YOU" written on the eyelids? He's the hot professor, the one his students lust after. Don't you remember how he escapes to his office and then has to climb out the window because of all the female students at his door? You remind me of the sexy academic Indiana Jones, not the whip-wielding, treasure- and Nazi-hunting Indiana Jones."