By Liam Falconer
A lot of things have happened in 2020. It kicked off with the bushfires then moved into a global lockdown, with the pandemic overwhelming our attention since March. However, a concept slipped into popular culture this year, becoming so entrenched that it is as if it were here the whole time. I am of course talking about the simp. You may be wondering, “What has simping got to do with economics?” Well, let me enlighten you!
To start, let’s introduce some key economy theories. A fundamental assumption of undergraduate economics is the idea of the rational agent. That is, an agent who perfectly understands their economy and will always attempt to consume bundles of things that make them the happiest within their income. This behaviour is known as utility maximisation. Pivoting to firms, the concepts of supply and demand come into play. As shown below, the intersection of these two curves gives you the market price and quantity of a given good. Though they seem unrelated, these two concepts are deeply intertwined with the concept of the simp.
The term only entered modern parlance this year (see graph below). Thus, the concept is difficult to define, and suffers from having multiple definitions and interpretations. For the purpose of this article, I will define a simp as follows: a person whose attempts to gain the affection of another (the simpee) through means that would be considered extreme by mainstream measures. It can come with negative connotations, but I am focusing on a purely formal definition for the purpose of economics.
Now that the concepts are established, a theory can be constructed. In the market for attention, simps function as suppliers while the simpees provide demand. In this model, the good is attention, however, price is more difficult to establish. The concept of an attention seeker implies that there is a social cost associated with demand. Running with this, the price in the model can be determined as the social cost of attention. When there is a high social cost, at work for example, the simpee will demand a low level of attention. As this price decreases, they demand more resulting in the downward sloping curve. The simp, by definition, will provide the same level of attention regardless of the social cost. Thus, they have a perfectly inelastic supply curve, that is to say vertical. This basic theoretical model is summarized below.
To determine if this is rational, we must introduce the concept of the mainstream frontier – the highest quantity of attention that society deems appropriate to supply or demand. Let this be exogenous (externally determined outside the model), and denoted as q*. This is shown below:
There are two cases in this model: one where the market for attention clear above q*, and one where it clears below. In the former case, the simp provides a level of attention at a low social cost to themselves but are supplying too much to be considered socially acceptable. In the latter, the simp is providing a relatively low amount of attention but is willing to do so at a high cost. In either case, it is important to consider if the simp is acting rationally.
Remember, to be rational, the agent must be maximising their utility. However, as determined above, the simp must either pay a high social cost (P2) or operate outside the socially mainstream frontier. Considering these costs, the simp must have a utility function that puts great importance on the giving of attention. On the surface, this may not seem rational. However, if the simp is acting in a manner that is making them the happiest, then they are rational actors from an economics perspective.
In conclusion, a model can be constructed that demonstrates the simp-simpee relationship. From this we can see how a simp may function even when there is significant social pressure to be different. Is this rational? Who knows. Is this model even legitimate? Most definitely not. However, it goes to show that the rational agent can be functional even in the most weird of circumstances.
Have we overlooked determinants of the supply of attention? Is it possible to calculate the optimal level of the mainstream frontier using social welfare functions? Is there an altogether better way of modelling simping? All are important questions we know our readers have an opinion about. UQES Publications welcomes reader correspondence on our articles. If you wish to reply to points raised, or believe a perspective has been missed, feel free to send respectful responses to email@example.com. We will endeavour to publish correspondence in subsequent articles.
This article originally appeared under the title: The Case of The Rational Agent: A Motivating Example from the Modern Discourse
Correspondence to The Makings of the Greatest Economy
I like the article but I think it’s unfair to large economies to use per capita statistics like GDP. With the example of Monaco, there are certainly towns in America with a higher GDP per capita (San Francisco is one example). That doesn’t necessarily mean America is “the greatest economy” but I think it’s somewhat more impressive than per capita statistics give it credit for. For example the EU’s overall GDP per capita is quite a bit lower than the US. If you add up the populations of countries with a GDP per capita higher than the US it’s less than 40 million so I think that says something. Obviously the sustainability and equity issues from the article are still relevant though.
~ Daniel Walton