A Fool And His Money Is One Big Party

Book review of "Hate the Game" by Daryl Fairweather

second picture i’ve taken for this blog

I was fortunate enough to get an advance copy of Daryl Fairweather’s Hate The Game, which came out yesterday and sold out already, and I’ve been reading it for a few weeks so far. It’s really good! I’ll go into a bit more detail, but basically the book follows some “principles of economics” with applications for real, ordinary life, as well as through pop culture. I thought it was a solid, entertaining, informative read.

They targeted gamers

The book’s introductory section explicitly compares it to Freakonomics, a book I don’t particularly like. The core of the comparison is that Freakonomics uses economics to explain everyday situations, like how drug gangs work or how prostitutes make money. The main reason why I didn’t like the book (which is basically the point of my review) was that it didn’t really focus on economic questions, but rather, on random questions that economists could answer with the techniques of econometrics - stuff like “do gay men fake being straight to not get AIDS”.

So what I like about the book is that it takes a similar approach but answers economic questions and gives useful, real-life advice backed from evidence. For example, how knowing the basics of game theory can help you navigate a better salary offer in your new job, or how understanding how people choose a home can help you sell your home in better terms. Some of it is explained with stories from the author’s own life (for example, how she advised a classmate to keep his feelings for an engaged member of their study group together so they wouldn’t have a harder time doing the assignments¹) or from pop culture (such as how Matthew Knowles, manager of the band Destiny’s Child, made his daughter Beyonce a pop superstar by prioritizing her over her bandmates when making decisions).

Of course, I could summarize the book’s contents, but there’s a lot going on and it would be pretty boring to just list off a bunch of concepts without fun connective tissue like Taraji P. Henson’s post-Oscars career, so I’ll be brief: many situations are structured as how economists call “games”, that is strategic decision-making environments with limited options and clear payoffs. The most common example are negotiations - you know what you want, the other person knows what they want, you don’t know what the other person wants, you need to go to the middle. But a lot of other things are “games” even if less straightforwardly - for example, how to impress a manager at work, or how to land a date, or how to remain in a successful relationship. It goes without saying that “approach every interaction like an economic game that you have to win” isn’t a healthy mindset, but for example when you have a disagreement with your partner, you need to know what you want out of the relationship, what you’re not willign to compromise on, and what you are willing to. Maybe you don’t want to visit the other person’s family on Christmas, but you can give up Father’s Day, or whatever the hell the disagreemnt is about.

The reason why I like writing like this is that I find people to have very disorganized thinking about “economic” concepts, in ways that books and public-facing items can address. Let’s take an example: people on Twitter were wondering whether Denmark has a higher quality of life than Alabama. The answer is obviously yes, but it’s pretty deceptive - first, because nominal euro/dollar exchange rate frequently make it seem like the US has a much bigger lead than it has; second, because of high inequality in the US and low in Denmark means that apples-to-apples comparisons are really different across the income scale; and third, because a big disparity is that Europeans pay a lot more in taxes, but also get a lot more in (hard to give a market value) public services and benefits, which makes straightforward cost/benefit comparisons hard. The last part is I saw many people bring up that Denmark has a “higher cost of livign”, which is valid, but a large part of the reason is that Denmark is a much richer place than Alabama, and things like housing cost more in richer places for the same reason that haircuts cost more in the US than in Zimbabwe (aka the Balassa-Samuelson Effect) - the price consumer goods is systematically higher in richer places.

I like the If Books Could Kill podcast, which covers nonfiction bestsellers like Rich Dad, Poor Dad (which is where the titular quote comes from - it’s a malapropism of “a fool and his money are soon parted”), The Five Love Languages, or more think-y stuff like Nudge. A running thread is that the advice these books give is usually bad and has no rigor, they’re usually full of falsehoods and misquotes, and have a tendency to smuggle in weird, reactionary social ideas into the premise². So good public-facing economics can help organize thinking around economic ideas in ways that are productive for public conversation, both in terms of having empirically sound approaches and of having a more honest framework for conversation than “women be shopping”. One such area that the book handles very well is discrimination - whether women and minorities face disadvantages in certain areas of life is discussed in accordance to the evidence, and then it’s used to give people clear advice. I’ve written about the limits of individual versus systemic action before, but I think the line is drawn pretty clear: they’re different games. If you think that being a woman needs you to do unnecessary thing X that men don’t need to do in order to prove your competence and get a promotion, you can of course refuse to do it and miss out. But you can also do it and attempt to change the system. They’re not the same game.

Home team advantage

Housing is the biggest purchase most people make and it’s by far the largest expenditure for most people. So it’s very complicated high stakes to make the correct call on which houses to buy/rent, and what information to consider.

In general, most people tend to consider both location and the qualities of the house itself jointly - in particular, for fairly obvious reasons, people want to live in a place that’s acessible from where they work. With income as a given, most people figure out which home they like and then decide whether the price is right - however, the approach suggested in the book is to know how much you’re willing to spend before you commit. Importantly, both the seller and the buyer have an amount in their head, and it’s in their best interest not to reveal it - in case they can negotiate a better deal. However, it’s also in their interest to be honest, because they do want to live in the house if they’re engaging in negotiation. So the book has advice for you, which is usually to be strategic about what information you reveal - especially because you can be overpaying if the structure, for instance, needs work done or has some hidden downside to the location.

Most of the advice is practical and for the house searching and negotiation process, but I think that fundamentally the book gets right that it’s about information. Information about the location of the home, the accessibility of various amenities and services, the quality of the area and the neighborhood are publicly known - but not necessarily the value that one gives to each. On the other hand, most of the invisible details about the house are not known to the buyer - the state of various utilities, noises, smells, and the like. So the key to housing success is to have information about the home, especially in the form of reliable and detailed public statistics.

I liked the housing insights because they’re very straightforward, informative, and also because the author is obviously informed about the topic (she’s chief economist at a real estate company). And housing is very macroeconomically important, as well as mattering tremendously to personal finances, so understanding it as a market is crucial to fixing core economic problems such as homelessness and the cost of housing, financial instability, inequality, slowing productivity and economic growth, gender and racial disparities, or environmental issues - in particular, the author advocates for a Land Value Tax, which is a tax on the value of the plot of land a property sits on, rather than the structure. This would disincentivize overbuilding in “low value land” (which would deter gentrification), and would incentivize higher density in high-value areas, which improves economic outcomes. However, the “LVT” also has high administrative costs (because the value of land is very hard to estimate separate from the structure), which would make it less desirable. So I’m torn on one of the book’s major ideas, but mostly because the merits aren’t all that clear to me.

All’s fair in love and work

The books three main lines of advice are on work, life, and love. I think that the first two thirds of the post cover life pretty well. But something I have been noticing a lot is that the two are pretty similar: primarily, that it’s all about search and matching.

In economics, “matching” is when you have to pair up two parties for an interaction of some sort - usually, to distribute a scarce good. The guy with the important work here is (Bluesky mutual of mine) Alvin Roth, who wrote a great book about it and also won a Nobel Prize in 2012. Roth’s most famous work was on kidneys: to donate a kidney you need a donor who has a compatible organ. Imagine, for example if my dad has a type Z kidney and I have a type Y, but there’s a pair of people that needs a type Y kidney and can only donate a type Z, there has to be a mechanism where I can donate my kidney to the other person and the other person’s donor can give theirs to my dad. You can already see how this starts to get relevant for both markets. In both dating and in job-seeking, you need to have both sides want the same things in similar conditions. If you’re going to a job interview, both sides have to agree on pay, conditions, what kind of tenure the job has, office environment, etc - Hate the Game talks a lot about how to give signals for this kind of information, and how to receive it without necessarily asking. And if you’re dating, you want to know whether the other person is attracted to you, what kind of relationship they want, whether they want something long term or casual, etc.

There’s three main issues in matching markets that policy has to solve: first is whether a market is “thick” (that is, has enough people both buying and selling), whether it’s congested (that is, whether it’s possible to actually evaluate a potential match in a timely manner), and whether it’s safe (self explanatory). Let’s start with thickness: in both dating and work, you want to have enough of both parties to have a pool that is satisfactory - economies with high unemployment are generally considered bad, and dating pools where most people are single are undesirable³. Back in ye olden days, it was usually a given that most people would date through their social networks and would schmooze for a job, and that meant that there was a big premium on “big pool” and on extraversion because smaller pools have less good matches. However, we have dating apps and online job search now, the problem should have gotten better, right?

Wrong. The main thing to know about online job search is that it does increase the amount of jobs a person sees, and that in bigger markets this helps improve the quality of the match, but also that it doesn’t provide a lot of information that is very valuable - particularly on the non-wage qualities of the job. Because non-wage job perks are extremely important for workers, this means that actually online job search can be a lot less efficient than initially thought. For example, AI-written job postings are substantially less informative and substantially less likely to prompt people to apply, in large part because people just don’t seem to derive much of anything from them. In particular, it doesn’t seem that online “advertisement” is very useful to people seeking the services, such that a lot of the information just doesn’t go through. This gets to the second problem: dating apps, much like places such as LinkedIn or Glassdoor, are just too congested by generic, uniformative, uninspiring options. People don’t provide enough specific information about what they’re like.

Particularly, the quality of matches in both sides seems to be much lower for the side with “decision power”: for women, they get inundated with tons of low-quality matches with guys who don’t message back, or don’t make good conversation, or are just plain weird (safety!). And for companies, they get too many useless applications, and generally run them through software that misses out on great options. The algorithms just don’t seem very good or efficient in either case. This also has to do with another topic the book touches on: signaling. A signal is a piece of information that a person gives another in order to secure the match. When signals are costly, you have too few matches- think people cold-approaching strangers at bars, or faxing in your CV - because the expected utility isn’t always the same as the expected benefit. However, the cheaper the signal, the fewer matches as well, because you get too many options that just don’t have any information. Think of people putting their height on dating apps: because you don’t need to verify it, you can just put you’re 6’0 (or 1.80 in sane countries), resulting in some pretty funny outcomes.

Conclusion

So Hate the Game is pretty good not just as an economics book, but also a business/self help type book, which are usually pretty bad. It’s fairly straightforward and informative and I thought that the advice was generally reasonable and seemed empirically sound, as well as checking with my own personal experiences in the areas where I’ve been involved (mostly work TBF).

Now for some personal talk: I used to be pretty stressed out about job search a few years back because I’d gotten most of my jobs through referrals, so I was worried I wouldn’t be able to find anything because online search felt impersonal and overwhelming - you just chipped away 24/7 without ever hearing back. Then I had surgery and had to leave work to recover, and after a bit of search I got my current job, which made me feel way more at ease because the process was pretty fast and I came off well at interviews. A while back, I was considering starting to look for work again (after I settle into my master’s), because I didn’t think I was making as much money as I could, but I got offered a raise and some benefits I didn’t have before, so now I’m staying on because I’m pretty happy with what I’ve been doing.

Much more personally, I was in a relationship for just under 3 years until fairly recently, and we broke up because we had pretty different views of what we wanted going forward. It was amicable because we both realized that, if we wanted different things, we couldn’t be happy together, even if we got along great. So now I’m pretty intimidated by looking again, because I’ve never really actively dated and I don’t think dating apps are/were useful at all - too many randos and whatnot. So I thought that the book’s advice for both job search and dating was pretty good, because in the end it was the same for both, and it was mostly to know what you want, know what you’re worth, and try your luck in ways that are advantageous. So that’s pretty scary and for the moment I’m sticking to work and getting settled in my master’s. Also IDK my DMs are open?

1. The funny thing about the story is she was laser-focused on beating a Guitar Hero song with a drumset in the middle of all that

2. The 5 Love Languages is the poster child for this trend - a seemingly innocent premise of “how to give your partner compliments they’ll appreciate” is full of stuff about how women belong in the home and men are supposed to be the providers, and in the 1995 version a woman with an abusive husband is told to have sex with him so he calms down.

3. Not to be confused with whether the dating market is thicc.