Intimate relationships are some of the most vulnerable states that we can engage in as fellows. The emotional and sometimes physical repercussions of these interactions can be immense, but in societies where social skills are basically left for families to teach, (rather than strong cultural institutions — USA! USA!) we might also imagine that there is a high degree of variance of emotional regulation, social norms (multicultural societies,) maturity, and well-adjustedness.
This hastily-written article expands on a thread on my personal Twitter.
To compensate for these variances and the lack of data around these conditions for each person, we can design financial incentives that protect both parties, filter out mates that might have ulterior motives, improve the workings of existing relationships at all stages, encourage prolonged connectedness, and even motivate the healing of old wounds.
Now you might say that it’s heresy to bring financial transactions into emotional relationships, and I would say that this is a relatively recent norm, looking at the past reveals several traditions of arranged relationships incentivized by familial wealth, diplomatic relations, and economic partnership. These situations presumably benefited comparatively from one key feature that I’m aiming to return to contemporary bonds: clear negotiation and high stake-in-the-game (admittedly usually in the context of patriarchal societies.) There are many other reasons to dismiss this concern (marriage/prenups do the same thing!) but they are probably beyond the scope of this article.
Now, with the background being that talk is cheap, and our time and emotional wellbeing are precious, consider the following:
You and your new date have been seeing one another for over a month and it’s going great- but you don’t have a lot of info about their background, maybe they just moved from out-of-state. You’re open to a more committed and invested (I’m foreshadowing here,) relationship, but you lack trust in the sincerity of their character occasionally and find yourself hesitating to deepen the connection. Enter the mechanism.
You propose to your partner to each commit 2% of your yearly incomes into a trust. The percentage allows for equal impressions of impact among different income levels, but in this case, let’s say you both make the same amount: 50,000 USD. If you both contribute 1,000 then, you’ll agree to a committed relationship.
The secret is in the terms and behavior of this fund once committed. Distributions must be mutually agreed upon. You might recognize this arrangement if you live in the US as the ‘earnest money deposit’’ that homebuyers offer sellers as a proof that they will not waste sellers time, and to compensate for potential bad-faith dealings and also for the opportunity cost of delisting the property.
This term is powerful because it means both parties must have a satisfactory view of the performance of all parties in order for any of the parties to recover their investment. There is the presumption of a financial loss if behavior falls below a standard of care. The next question you might have is who determines the standard of care? The participants themselves.
In all relationships this agreement is too often implicit- parties rely on their presumptions, cultural expectations, prejudices and hopes to impute their partners with responsibilities. Occasionally, there is a more clear and open discussion about wants and needs, and the partners form consent in an informed and voluntary fashion.
To be clear, we want more of that — but it can’t be determined at only one point in time; that point of the deposit. This negotiation must be dynamic, responsive, adaptable to the environment and personal growth of the partners. So, to summarize, we’re incentivizing responsiveness, communication, and mutual respect- not some strict or unchanging terms. In doing so, we aim to mitigate the various risks associated with intimate relationships, recognize the seriousness of our partner's wishes, and promote initial senses of security at the beginning of relationships, where it is most lacking.
If all goes according to plan, the partners have listened, responded, avoided exploitation of one another, and repaired trust after negative interactions. One day, their relationship might come to a change and they decide to split ways. They both sign off on the distribution and close of the account and recover their initial deposit. Inversely, if anyone felt overall disrespected, parties may refuse to distribute the funds. In this determination, it’s important to recognize that they both pay a cost for this: the denying party/parties do not recover, even though they may feel they upheld their side of the agreement. It was worth the cost to the dissatisfied partner to communicate that dissatisfaction and to deny the other their recovery, so we should take that action on a degree of seriousness.
That is where much of the cooperative force comes from- the need for everyone to consent to the action. Formally, this resembles a governance system called sociocracy, which promotes socially harmonious environments through full consent of all participants, rather than even majority-rules decisions.
Years later, those funds will still be sitting in that trust — which means there will be a good reason to make amends and even years later obtain the mutual consent necessary. We can get creative with the terms and agree to only small distributions with consistent good behavior.
As people get older, their incomes generally rise (until a certain point) so what 2% at 50,000 USD might not be as compelling an incentive if you're making 70,000 USD later on. Include inflation, the rising cost of goods and services, and you’re looking at getting less value back than you started with, and with less incentive force as time continues.
To combat this we should put this fund to work. The trust might be used to purchase stock in index funds or bonds — the partners can decide on that, but the point is, that the longer the relationship continues, the greater the incentive for achieving that standard of care should be, partly because of the economic implications described above, but also that longer-term relationships often carry with them greater burdens, children for instance.
We can imagine prediction markets or a variety of other financial derivatives forming — bets on what happens to the trust, which might incentivize families of the partners to cooperate or if they are adversarial, to signal that adversarial nature in a way that increases information symmetry between all involved- partners and families/friends. Better to have an adversary and to know it than to not know.
If widely utilized, I suspect that this would decrease the number of relationships that form, but the ones that did would be higher quality, more committed, and would benefit from the shared project of a financial seedling. As a filter on the front-end of dating, it helps us avoid partners who may only be looking to waste our time or are not serious about their requests for commitment. Differences in trust on the sides of each party can be covered by the initial commitment negotiation, e.g.“Due to previous trust violations, I request that you triple your contribution to the fund to demonstrate your sincerity.”
The growing field of decentralized finance is a perfect environment to test these kinds of incentive games. Systems like PoolTogether’s no-lose lottery are great examples of how people can easily coordinate financial resources for mutual benefit. DeFi broadly allows us easily create accounts, monitor actions transparently, control distribution using multi-signature contracts, and much more.
Now technically, none of the ideas described here require blockchain-based systems, but they are made more accessible and cost-effective through them.
