Wednesday, March 01, 2006

Law, Economics, and Engagement Rings

I stumbled upon a really interesting idea today: that diamond engagement rings evolved as "performance bonds" for pre-married couples. Basically, if women are going to lower their prospects for future marriage by being physically intimate with their fiancee, they want some compensation if the guy leaves before they actually get hitched. So engagment rings are just that compensation. If the guy decides he doesn't want to get married for whatever reason, at least the girl can keep the ring.

I found it on David Friedman's Law & Econ website, and it was in a 1990 paper by Margaret Brinig. I'm not sure if I buy the argument 100%, especially since it doesn't explain why we continue to buy these things despite changing social norms (I'm guessing fewer people wait for marriage or engagement than used to), but I still think the idea is fascinating.

25 Comments:

At March 01, 2006 4:48 AM, Blogger David Friedman said...

My memory of Brinig's piece is that she found a considerable decline in the custom in in recent decades--presumably because loss of virginity no longer resulted in a significant decrease in marriagability for women.

 
At March 01, 2006 8:23 AM, Blogger Chris said...

Travis, we talked a little bit about this last night. What about the lawsuits where the woman has to give back the ring?

My fiancee was telling me about it one time: that if the ring was given at the time of holiday or birthday, it was treated as a gift and so if the relationship declined she got to keep it, but if it was given specifically as an agreement for future activity (to include marriage) then it might have to be given back (both ethically and legally).

If the woman is in breach of the marriage contract, wouldn't she have to give back the ring, even though "services" have already been rendered. It would be different for the man. If he was in breach of contract then it is simply that she gets to keep it.

Also, do you want to talk a little bit about the liability rule that you mentioned yesterday?

It seems to me that an engagement ring is closer to collateral on a contract, so the party that breaches the contract loses the collateral.

 
At March 01, 2006 9:43 AM, Blogger Travis said...

Thanks for taking the time to respond to our blog, Professor Friedman. We enjoy what you do.

It's definitely a plus for Brinig's argument that the custom peaked in the 1950's and has been on a steady decline since.

And Chris, I think a performance bond is a type of "collateral on a contract," so you won't find any disagreement there. Let me know if there's a fundamental difference between the two.

 
At March 01, 2006 10:36 AM, Blogger Chris said...

From Governing.com:

The number of Arkansas couples who entered into “covenant marriages,” which make it more difficult to get a divorce, in 2005 was 1,123.

Compare that to a total of 768 from 2002.

If we make the contract more difficult to break, how does that affect the "bond"

 
At March 01, 2006 10:48 AM, Blogger Chris said...

Apparently, a performance bond is:

A bond issued by an insurance company to guarantee satisfactory completion of a project by a contractor.

So it is close. It [performance bond] differs however since it is not given from one party to the other. If the engagement ring was paid for by the parents or family of one of the parties for the completion of the marriage contract (as insurance), then it might closer to a performance bond. But for a performance bond, what happens to it after the contract is complete? I don't think the insurance company gives the value of the bond back to either party -- so no one would be keeping the ring after marriage.

I dunno... I might be reading it wrong.

 
At March 01, 2006 10:53 AM, Blogger Jenna said...

Chris, I think that even using the definition of the "performance bond," engagement rings still fit.

Also, I'd like to throw another question into the mix: why haven't engagement rings for men ever become popular? Is it because men don't really like rings anyway, and wouldn't care if they had to give one back? Or is it because men are no less marriageable after losing their virginity?

This counterfactual might help in determining the actual function of an engagement ring.

 
At March 01, 2006 11:06 AM, Blogger Travis said...

"Or is it because men are no less marriageable after losing their virginity?"

That's definitely part of it. That, plus the risk (especially pre-1960's) that the woman would become pregnant and have to bear the cost of the child if the fiancee left.

But maybe the custom has indeed changed with the social climate. Roy just asked me if wasn't customary now for the woman to return the engagement ring in the event of a break-up. This would be consistent with a smaller loss (or none at all) of marriagability for women after losing their virginity.

 
At March 01, 2006 11:25 AM, Blogger Jenna said...

Conventional wisdom, I think still says that the woman only returns the ring when she breaks off the engagement. If the man breaks it off, the woman scorned gets to keep, pawn, etc., the ring.

Side note: A fiancé is a man; a fiancée is a woman.

 
At March 01, 2006 12:15 PM, Blogger Guillermo said...

The idea of an engagement ring to in the first place in an unnecessary socialization thing. It goes with the idea that the woman is publicly agreeing to become that man's property while he doesn't have to deal with publically agreeing to becoming the same. Honestly, to me a wedding band is good enough. I know that doesn't flow with many females that wait all their childhood/adolescence and sometimes even adulthood for it.

Besides, so much emphasis is put on the diamond. The diamond industry is a problem of its own. Imagine (to you females) your fiancé gives you an engagement ring. He can't really prove where the diamond came from or under what conditions it was mined. But do you know that it is suspected that Bin Laden and other terrorist organizations, exchanged currency for "blood" diamonds in deals with African leaders in Liberia, the Congo and Sierra Leone to finance his operations. Huh...makes you think twice if you really like your diamond, doesn't it?

Follow the link..

 
At March 01, 2006 1:11 PM, Blogger Travis said...

Thanks for the french lesson, Jenna. I really wish we had a non-french word for that. Any proposals? (ignore the pun)

 
At March 01, 2006 1:55 PM, Blogger Guillermo said...

sorry, here is the link, having issues with the hyperlink thing. just highlight it and cop/paste in browser.

http://www.globalpolicy.org/security/issues/diamond/2002/1020diamond.htm

 
At March 01, 2006 2:17 PM, Blogger Jenna said...

I knew 12 years of French would eventually be good for something!

I propose "betrothed" (n. A person to whom one is engaged to be married) or "intended" (n. Informal: A person whom one intends to marry; a fiancé or fiancée) as alternatives to the gender-specific French versions of the concept.

 
At March 01, 2006 3:28 PM, Blogger Travis said...

Your clever ideas may have just rendered your training in french useless...

Maybe not. Betrothed just doesn't sound like a good thing to be. Is there any slang I don't know about?

 
At March 01, 2006 3:39 PM, Blogger Chris said...

Ummm...engaged

 
At March 01, 2006 3:53 PM, Blogger Travis said...

No, no, no. I can't go around introducing people to my "engaged." Try again.

 
At March 01, 2006 4:00 PM, Blogger Jenna said...

"Engaged" is an adjective...we're looking for a noun.

Ex: Hi, John Doe, I'd like you to meet my [fiancé, betrothed, intended, person to whom I am engaged]...

(What I lack in actual economics knowledge, I can apparently make up for with grammar and conventional wisdom.)

No other thoughts on why men's rings haven't caught on?

 
At March 01, 2006 4:24 PM, Blogger Travis said...

Jenna politely (and confidentially) pointed out that I made it sound like I actually had an "engaged," so I will clear this up by saying I don't have one.

I was just using Chris's suggestion in a sentence to show him how silly it sounds.

Jenna, how do you show possession with names that end in "S"? Is it Chris' or Chris's?

 
At March 01, 2006 4:41 PM, Blogger Chris said...

I hate you guys...

 
At March 01, 2006 4:42 PM, Blogger Chris said...

And I always wonder about semi-colons... I mean, like what the hell?

 
At March 01, 2006 4:46 PM, Blogger Chris said...

Also...you could do it Roy style -->

I would like to introduce you to my ex-girlfriend(bf).

 
At March 01, 2006 4:49 PM, Blogger Jenna said...

The short answer is that either form is acceptable.

The long answer is:
-Pronunciation should guide possessives on words ending in S
-Thus, Chris's is the more common form, as "Chris's" is how most people would pronounce it
-However, Chris' is also acceptable, but more archaic
-Proper nouns and regular nouns follow the same pattern

Some exceptions:
-When the word is also a plural, just the apostrophe is added: ex - "employees' health plans"
-When it would be really awkward to add an S, don't: Jesus', Achilles',etc.

 
At March 01, 2006 5:17 PM, Blogger Travis said...

I think semi-colons are kind of a half-rest; they separate complete sentences without completely losing momentum.

I don't know what the books say and Jenna just left for the day. We might just have to stay in the dark on this.

 
At March 02, 2006 8:39 AM, Blogger Chris said...

Here is some more for our original post - via the Molinari Institute and the Mises Blog.

Here is the specific article, titled Love, Marriage, and Divorce

 
At March 03, 2006 9:18 AM, Blogger Jenna said...

A quick run-down on the semi-colon:

It joins two sentences that are a part of the same thought; using an "and" in the same position would make it a run-on sentence.

 
At March 03, 2006 1:29 PM, Blogger Chris said...

Jenna makes learning fun. Why aren't you going into Grammar?

 

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