Friday, January 9, 2009

What's Booming in the Recession?

Based on FT's columnist Lucy Kellaway's personal experience and investigation, the hottest recessionary activity in town nowadays is looking for relationships on adultery websites, particualrly for those males in the financial sector. "It seems the colder the market for jobs, the hotter the market for adultery."

But why is it that so many senior business people are responding to recession with adultery? John Quelch, professor of marketing at Harvard Business School suggests that "bankers are suffering from a risk deficit: their working lives have been derisked compulsorily and this could be a way of compensating by adding risk to their private lives." However, if this is true, then there would be a mass shift from taking risks in the financial market to taking risks in the domestic market, will this lead to domestic instability and a surging divorce rate?

On the other hand, the founders of adultery websites would like to argue that, by providing a well-behaved marketplace for adultery, they are actually creating domestic stability. Adultery is claimed as an alternative to divorce, not as a precursor to it.

In my opinion, the divorce rate tends to go up. The website founders' argument could not stand in the sense that if people tend to choose the alternative if it is available (Say's Law, supply creates its own demand), then it would eventually become a precursor. By providing a market for adultery, the cost of divorce is actually decreasing since people can easily find someone to "hug" in this adultery market, which implies that the "demand for divorce" would increase. However, if this is true, why would there be an organized market for adultery? Maybe the reason lies in the fact that people can never say whether their marriages are successful or not. This market, per se, just provide a way to find a more suitable lover.

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