Haley is in a bind and can’t decide who she should spend her life with. Should she stick with Arvin, the successful scientist who has his life together, or should she go with Dylan, her high school boyfriend who is full of fun? Every decision we make, whether we realize it’s economics or not, has tradeoffs. There’s only so much time in our lives and we must make decisions. One of the difficult parts of “matching” is finding the right rate to minimize conflict and maximizing our happiness. Happiness, in this case, is known as interdependent. Her happiness will eventually be a function of her own utility, but also her spouse’s utility.
See more: assortative mating, interdependent utility functions, matching, opportunity costs, tradeoffs
Mitch and Cam have promised Lily that they can adopt a cat and name it Larry, but it turns out there is a lot more paperwork than they were hoping for. It turns out the cost of adopting the cat is beyond just paying for it at a shelter, but also involves forms and a site visit. Cam is quick to point out that there are a lot of cats that the shelter appears to be trying to have adopted, implying a surplus of available pets. A surplus occurs when the quantity supplied exceeds the quantity demanded at a particular price. That surplus wouldn’t exist if the adoption process was a bit easier (i.e. the price of adopting was lower).
See more: allocation, costs, demand, excess quantity, matching, prices, quantity demanded, surplus, transaction costs, wasted resources
Andy currently works as Jay and Gloria’s “manny” (a male nanny), but he’s interested in changing jobs. He’s been spending a lot of time with Haley, which initially makes Phil and Claire suspicious of a budding romance. In this scene, Andy approaches Phil because he wants to become a real estate agent. He knows that he’s going to need to acquire more human capital before he’s able to do that so he asks to work as Phil’s new assistant.
In this scene, we watch Andy interview for this job. It turns out that Haley and Andy have been spending time together practicing their interview skills. Interviewing is like other productive activities and requires a special set of skills that we can get by practice. The better someone is at interviewing, the shorter the amount of time is that they will be among the frictionally unemployed (unemployment that results because it takes time to match the right worker to the right job). Phil makes Andy prove his dedication to becoming an assistant and highlights one of the crucial elements of job markets: the matching process. Firms don’t hire just any workers, but instead want to identify workers that will make a good “match” with their firm.
See more: frictional unemployment, interviewing, human capital, labor market, job search, matching, unemployment
Mitchell complains to Jay about Cam being too nice, and Jay complains to Mitchell about Gloria not liking his dog butler. In the beginning of the scene, the two complain about the actions of their partners and how it imposes a cost on them that they feel their partner is not considering. Jay loves his dog butler, but he also doesn’t want to upset his wife. Cam spends a lot of time helping people and animal, but Mitchell feels it is sometimes a burden.
Jay notes that they are both with people who are very different and that maybe that makes their relationships better. The concept of interdependent utility functions is that people maximize combined utility of a household/relationship even though that means they way not be maximizing their own individual utility functions.
See more: assortative mating, gains from trade, gains to marriage, interdependent utility functions, matching, preferences, utility