Business arrangements I would bet against

by on April 13, 2009 at 3:25 am in Current Affairs | Permalink

One sugar daddy whose screen name is Sam has tried long-term
girlfriends, mistresses, prostitutes and a brief marriage. Now single,
the 39-year-old entrepreneur has found the arrangement that suits him
best: a monogamous business-associate-with-benefits deal in which he
pursues an entrepreneurial project with a young, beautiful, intelligent
woman. He provides financial backing, mentoring and networking; she
provides sex, fun and, inevitably, a bit of worshiping, all of which
make him feel virile and influential. In between vacations using his
private jet, both work hard on the project. They don’t tend to see each
other much, as he travels frequently for his work.

I don't recall seeing that arrangement anywhere in Oliver Williamson's typology of the business firm.  Should I have entitled this post "What people will spend on theatre"?  Does this make it sound better?

Sam runs these relationships with an explicit business plan, a set
budget, measurable goals and quarterly reviews. From the outset, the
contract has an end date. It’s a brilliant, if contrived, way to
protect his pride. The contract specifies that the romance and sex are
to end by the preset date, so there’s no break up, no rejection, no
bruised ego. She’s not dumping him; the gig’s just over.

Here is the much longer story.  Here is more:

He has an almost mathematical approach to assessing relationships, and
once even computed the costs for a girlfriend, mistress, prostitute and
wife – mistresses turn out to be most expensive by the hour; wives, by
the year; girlfriends are cheapest all around. But he’s not as
calculating as he seems. In fact, he concluded there’s little
correlation between cost and quality. Still, he is relentlessly
searching for an algorithm that will predict relationships’ success.

1 Melpomene April 13, 2009 at 4:02 am

Why did you delete the post about suicide in India and China?

http://www.marginalrevolution.com/marginalrevolution/2009/04/china-and-india-suicide-fact-of-the-day.html

It still shows up in a Google search as well but was not indexed by them yet. This is really mysterious… There didn’t seem to be anything wrong with the post and I was interested to read the comments.

2 cultured ape April 13, 2009 at 5:12 am

Seems he hasn’t tried polygamy in a poor country. Just taking it easy with the locals instead of all this busyness with strivers.

3 londenio April 13, 2009 at 7:05 am

I agree with Jim about the hack on prostitution. Though it can also be seen as a hack on traditional relationships.

We can think of a spectrum in which street prostitution is at one extreme: single transaction, no added service, low re-trial (well, who knows). At the other extreme is an egalitarian marriage: two partners symmetrically sharing everything, from sexual activities to money, to everyday experiences. In between, you find many kinds of behaviors. The traditional patriarchal marriage as well as the typical suggar-daddy arrangement fall somewhere in the middle. So do escort services.

The business proposed in the article is located somewhere between suggar-daddy and escort services.

4 anon April 13, 2009 at 9:36 am

this dude is a loser

5 mobile April 13, 2009 at 9:58 am

Still, he is relentlessly searching for an algorithm that will predict relationships’ success.

Hasn’t this guy heard of eHarmony?

6 athelas April 13, 2009 at 10:29 am

It seems there’s an additional opportunity for him to profit; it would certainly be beneficial in certain negotiations to have a charming, pretty young thing whom he can direct to be flirtatious towards opposing parties.

7 JP April 13, 2009 at 12:49 pm

Michael Smerconish interviewed the founder of this business on his radio show this morning. I imagine he’ll post a podcast eventually.

Re Sam: As Tyler suggests, he’s paying for theater. Sam’s arrangement is just a more complicated (and presumably more fun, for him) version of sexual role playing. Even when one knows the escort does not really care about one (other than as a customer), the appearance of care, if decently acted, can be deeply satisfying.

8 Shaun April 13, 2009 at 1:33 pm

At least he gets to enjoy his self-deception.

9 Joshua Allen April 13, 2009 at 3:02 pm

This is an awesome post, and Tyler’s comment about “what people will spend on theater” sums it all up very insightfully. I love stories about people who turn their real lives into caricatures.

@JP: “Deeply satisfying” doesn’t exactly jive with “relentlessly searching”. He’s “relentlessly searching” because he is convinced that some day in the *future*, he’ll find a way to be “deeply satisfied”.

10 Neal April 13, 2009 at 9:02 pm

The fact he needs to search for a formula to predict relationship success suggests that he will never find one.

11 Brian McDaniel April 14, 2009 at 2:54 am

Don’t forget the tax angle. Since its a business expense, presumably Sam can write off the payments to Alice (or at least capitalize the payments, and write off later as a capital loss). This is an important consideration to high earners who may be facing 50% marginal tax rates.

12 JoshT April 14, 2009 at 2:29 pm

If marriage itself did have any financial advantages such as in taxes, and if finances could not be legally combined what would you assume the reduced rate of marriage to be? Obviously finances are large component of every single relationship, so why are people pretending that their relationships are entirely independent of financial considerations? Perhaps the issue is with the degree of emphasis on money, but again I think that has more to do with culturally inherited notions about money and marriage.

I’m generally impressed by the readership at MR, but I was surprised at the responses.

13 anonymous April 19, 2009 at 1:09 pm

Breaking news from The Onion: this sort of thing is far more widespread than anyone ever suspected!

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