The Irrational Economics of Financial Domination

A short essay in which I apply Behavioral Economics concepts to explain financial domination.

“Men do stupid things when they’re horny. But at the end of the day, they’re only responsible for themselves.” – Ceara Lynch

Just Horny Men Doing Stupid Things?

I’ve observed and been involved in the online financial domination community for over thirteen years. During that time I’ve spent well over six figures on tributes and gifts for women who, aside from the infrequent cash point meet, I’ve never met! Which, in terms of traditional economics, is a pretty fucking irrational thing to do. So why do I do it, then? Good question.

Over the course of those years, I’ve read a couple theories that try to rationalize that sort of spending on financial domination (see footnote 1.) The most common idea is that money is a surrogate for power and that, for the genuinely submissive male, financial domination is a very real form of power exchange. For those submissive men, handing over their hard-earned money to a dominant woman while being denied any sexual and/or romantic reciprocation is about as real as female domination gets. Or as real as it can get over the internet anyway. I’ve also read that for others, financial domination is simply paying (and overpaying) a woman to orchestrate elaborate online fetish and fantasy games of degradation, humiliation, and sexual pleasure.

In my case, both theories would make sense if I were genuinely submissive or enjoyed being humiliated. But I’m not and I don’t. Mostly I spent that money because I’m lazy. I mean, when it came to playing around in my pretty mundane sexual fantasy land, I just prefer that the woman do all the hard mental work. Or to put it in play English, spending that money was simply my way to compensate the dominatrix for her time and effort.

Well, okay, maybe there’s a bit more to it. I mean, obviously what I was paying for was the woman’s attention. But, given all the free porn on the internet, why do I allow myself to pay so much? I mean, when it comes to money in general, I’m a pretty rational guy. For a good part of my career I lived, slept, and dreamed cost-benefit analysis spreadsheets. When it came to job-related financial decisions, I was good at it. In an era of shrinking top lines and relentless search for efficiencies, my skill at finding ways to get the biggest bang-for-the-buck with minimal risk was near legendary. In short, I’m not stupid.

So what’s up with me giving so much of my money away for so little visible return? That’s fucked up, right? Well, maybe not.

Enter Behavioral Economics

Clearly there are some pretty serious psychological factors at play. Factors outside the usual, more rational, economic calculus of supply and demand. But what those factors were and, more importantly, how they influenced my spending habits, were unnamed (and therefore largely unrecognized) until 2017. That was the year Professor Richard Thaler of the University of Chicago was awarded the Nobel Prize in Economic Sciences for his work in the field of Behavioral Economics. Dr. Thaler’s work established that when it comes to money, people are predictably irrational in ways that defy conventional economic theory. Which brings me back to all that irrational spending I did under the guise of financial domination.

Have a look at these two tables.

Tables 1

What would you say are the dimensions of the two tables? If you are like most people, you think that the table on the left is much longer and narrower than the one on the right. Now take out a ruler and measure each table. You will find that the two table tops are identical. Measure them until you are convinced, because this is a case where seeing is not believing. What should we conclude from this example? If you see the left table as longer and thinner than the right one, you are certifiably human. There is nothing wrong with you (well, at least not that we can detect from this test). Still, your judgment in this task was biased, and predictably so. No one thinks that the right table is thinner! Not only were you wrong; you were probably confident that you were right.

Now consider the figure below.

Tables 2

You can see that the legs and the orientation facilitate the illusion that the table tops are different in the first figure, so removing these distractions restores the visual system to its usual amazingly accurate state. These two figures capture the key insight that behavioral economists have borrowed from psychologists.

Normally the human mind works remarkably well. We can recognize people we have not seen in years, understand the complexities of our native language, and run down a flight of stairs without falling. Some of us can speak twelve languages, improve the fanciest computers, and/or create the theory of relativity. However, even Einstein would probably be fooled by those tables. That does not mean something is wrong with us as humans, but it does mean that there are predictable systematic biases in the way we think. Understanding these systematic biases and applying them to conventional economic theory is what behavioral economists do. Drawing on some well-established findings in social science, behavioral economists show it’s quite normal for individuals to make some pretty bad decisions —financial decisions in particular – decisions they would not have made if they had paid full attention and possessed complete information, unlimited cognitive abilities, and complete self-control.

But who has the time, the self-control, and all the necessary information to construct and populate a cost-benefit-risk matrix for all the financial decisions we make each day? No one. As a practical matter, when we have to make judgments, we use simple rules of thumb, called heuristics, to help us. These heuristics are more intuitive and automatic than reflective and rational, and we often make mistakes when we rely too much on them. The fact is that heuristics can lead to systematic biases in our decisions. And those biases can lead to irrational choices in the way we spend our money.

Behavioral economists have identified dozens of these cognitive biases (see footnote 2.) Some of these biases, such as confirmation bias, are readily recognizable in other people’s thinking, but most people have a hard time seeing biases that exist in their own thought processes. Nevertheless, they’re there. In this essay, I’ll examine those heuristics and cognitive biases which I think directly contribute to the irrational spending of financial domination.

The Hot-Cold Empathy Gap: Why Hot Is Much Hotter Than We Realize

Ask most twenty something male college students whether they would ever attempt unprotected sex and they will quickly recite chapter and verse about the risk of dreaded diseases and pregnancy. Ask them in any dispassionate circumstances—while they are doing homework or listening to a lecture—whether they’d enjoy being spanked, or enjoy sex in a threesome with another man, and they’ll wince. No way, they’d tell you. Furthermore, they’d narrow their eyes at you and think, “What kind of sicko are you anyhow, asking these questions in the first place?”

In 2001, while visiting Berkeley for the year, behavioral economist Dan Ariely and his longtime collaborator George Loewenstein invited a few bright students to help them understand the degree to which rational, intelligent people can predict how their attitudes will change when they are in an impassioned state. In order to make this study realistic, they needed to measure the participants’ responses while they were smack in the midst of such an emotional state. They could have made their participants feel angry or hungry, frustrated or annoyed. But instead they preferred to have them experience a pleasurable emotion. They chose to study decision making under sexual arousal.

There are sexual motivations everywhere we look, and yet we understand very little about how these influence our decision making. Moreover, since they wanted to understand whether participants would be able to predict how they would behave in a particular emotional state, the emotion needed to be one that was already quite familiar to them. That made their decision easy. If there’s anything predictable and familiar about twenty something male college students, it’s the regularity with which they experience sexual arousal.

Roy, an affable studious biology major at Berkeley, is in a sweat—and not over finals. Propped up in the single bed of his darkened dorm room, he’s masturbating rapidly with his right hand. With his left, he’s using a one-handed keyboard to manipulate a Saran-wrapped laptop computer. As he idles through pictures of buxom naked women lolling around in various erotic poses, his heart pounds ever more loudly in his chest. As he becomes increasingly excited, Roy adjusts the “arousal meter” on the computer screen upward. As he reaches the bright red “high” zone, a question pops up on the screen: “Could you enjoy sex with someone you hated?” Roy moves his left hand to a scale that ranges from ‘no’ to ‘yes’ and taps his answer. The next question appears: “Would you slip a woman a drug to increase the chance that she would have sex with you?” Again, Roy selects his answer, and a new question pops up. “Would you always use a condom?”

Berkeley itself is a dichotomous place. It was a site of anti-establishment riots in the 1960s, and people in the Bay Area snarkily refer to the famously left-of-center city as the “People’s Republic of Berkeley.” But the large campus itself draws a surprisingly conformist population of top-level students. In a survey of incoming freshmen in 2004, only 51.2 percent of the respondents thought of themselves as liberal. More than one-third (36 percent) deemed their views middle-of-the-road, and 12 percent claimed to be conservatives. Students at Berkeley are in general not very wild, rebellious, or likely to take risks.

The advertisements Ariely posted around Sproul Plaza read as follows: “Wanted: Male research participants, heterosexual, 18 years plus, for a study on decision making and arousal.” The ad noted that the experimental sessions would demand about an hour of the participants’ time, that the participants would be paid $10 per session, and that the experiments could involve sexually arousing material. Those interested in applying could respond to Mike, the research assistant, by e-mail. For this study, Ariely decided to seek out only men. In terms of sex, their wiring is a lot simpler than that of women. A copy of Playboy and a darkened room were about all they’d need for a high degree of success.

Shortly after the ads went out; and college men being what they are, Ariely soon had a long list of hearty fellows awaiting the chance to participate—including Roy. Roy, in fact, was typical of most of the 25 participants in the study. Born and raised in San Francisco, he was accomplished, intelligent, and kind—the type of kid every prospective mother-in-law dreams of. Roy played Chopin études on the piano and liked to dance to techno music. He had earned straight A’s throughout high school, where he was captain of the varsity volleyball team. He sympathized with libertarians and tended to vote Republican. Friendly and amiable, he had a steady girlfriend who he’d been dating for a year. He planned to go to medical school and had a weakness for spicy California-roll sushi and for the salads at Cafe Intermezzo. Roy met with the student research assistant, Mike, at Strada coffee shop—Berkeley’s patio-style percolator for many an intellectual thought, including the idea for the solution to Fermat’s last theorem. Mike was slender and tall, with short hair, an artistic air, and an engaging smile. Mike shook hands with Roy, and they sat down. “Thanks for answering our ad, Roy,” Mike said, pulling out a few sheets of paper and placing them on the table. “First, let’s go over the consent forms.” Mike intoned the ritual decree: The study was about decision making and sexual arousal. Participation was voluntary. Data would be confidential. Participants had the right to contact the committee in charge of protecting the rights of those participating in experiments, and so on. Roy nodded and nodded. You couldn’t find a more agreeable participant. “You can stop the experiment at any time,” Mike concluded. “Everything understood?” “Yes,” Roy said. He grabbed a pen and signed. Mike shook his hand. Great!” Mike took a cloth bag out of his knapsack. “Here’s what’s going to happen.” He unwrapped an Apple iBook computer and opened it up. In addition to the standard keyboard, Roy saw a 12-key multicolored keypad. “It’s a specially equipped computer,” Mike explained. “Please use only this keypad to respond.” He touched the keys on the colored pad. “We’ll give you a code to enter, and this code will let you start the experiment. During the session, you’ll be asked a series of questions to which you can answer on a scale ranging between ‘no’ and ‘yes.’ If you think you would like the activity described in the question, answer ‘yes,’ and if you think you would not, answer ‘no.’ Remember that you’re being asked to predict how you would behave and what kind of activities you would like when aroused.” Roy nodded. “We’ll ask you to sit in your bed, and set the computer up on a chair on the left side of your bed, in clear sight and reach of your bed,” Mike went on. “Place the keypad next to you so that you can use it without any difficulty, and be sure you’re alone.” Roy’s eyes twinkled a little. “When you finish with the session, e-mail me and we will meet again, and you’ll get your ten bucks.”

Mike didn’t tell Roy about the questions themselves. The session started by asking Roy to imagine that he was sexually aroused, and to answer all the questions as if he were aroused. One set of questions asked about about sexual preferences. Would he, for example, find women’s shoes erotic? Could he imagine being attracted to a 50-year-old woman? Could it be fun to have sex with someone who was extremely fat? Could having sex with someone he hated be enjoyable? Would it be fun to get tied up or to tie someone else up? Could “just kissing” be frustrating? A second set of questions asked about the likelihood of engaging in immoral behaviors such as date rape. Would Roy tell a woman that he loved her to increase the chance that she would have sex with him? Would he encourage a date to drink to increase the chance that she would have sex with him? Would he keep trying to have sex after a date had said ‘no’? A third set of questions asked about Roy’s likelihood of engaging in behaviors related to unsafe sex. Does a condom decrease sexual pleasure? Would he always use a condom if he didn’t know the sexual history of a new sexual partner? Would he use a condom even if he was afraid that a woman might change her mind while he went to get it?

A few days later, having answered the questions in his ‘cold’ rational state, Roy met again with Mike. “Those were some interesting questions,” Roy noted. “Yes, I know,” Mike said coolly. “Kinsey had nothing on us. By the way, we have another set of experimental sessions. Would you be interested in participating again?” Roy smiled a little, shrugged, and nodded. Mike shoved a few pages toward him. “This time we’re asking you to sign the same consent form, but the next task will be slightly different. The next session will be very much the same as the last one, but this time we want you to get yourself into an excited state by viewing a set of arousing pictures and masturbating. What we want you to do is arouse yourself to a high level, but not to ejaculate. In case you do, though, the computer will be protected.” Mike pulled out the Apple iBook. This time the keyboard and the screen were covered with a thin layer of Saran wrap. Mike explained that Roy would browse through a series of erotic pictures on the computer to help him get to the right level of arousal; then he would answer the same questions as before. (A complete list of the survey questions, with the mean response and percentage differences, is provided in the appendix.)

Within three months, some fine Berkeley undergraduate students had undergone a variety of these sessions. In the set of sessions conducted when they were in a cold, dispassionate state, they predicted what their sexual and moral decisions would be if they were aroused. In the set of sessions conducted when they were in a hot, aroused state, they also predicted their decisions—but this time, since they were actually in the grip of passion, they were presumably more aware of their preferences in that state. When the study was completed, the conclusions were consistent and overwhelmingly clear. Frighteningly clear. In every case, the bright young participants answered the questions very differently when they were aroused from when they were in a ‘cold’ state. Across the 19 questions about sexual preferences, when Roy and all the other participants were aroused they predicted that their desire to engage in a variety of somewhat odd sexual activities would be nearly twice as high as (72 percent higher than) they had predicted when they were cold. For example, the idea of enjoying contact with animals was more than twice as appealing when they were in a state of arousal as when they were in a cold state. In the five questions about their propensity to engage in immoral activities, when they were aroused they predicted their propensity to be more than twice as high as (136 percent higher than) they had predicted in the cold state. Similarly, in the set of questions about using condoms, and despite the warnings that had been hammered into them over the years about the importance of condoms, they were 25 percent more likely in the aroused state than in the cold state to predict that they would forego condoms. In all these cases they failed to predict the influence of arousal on their sexual preferences, morality, and approach to safe sex.

The results showed that when Roy and the other participants were in a cold, rational, superego-driven state, they respected women; they were not particularly attracted to the odd sexual activities we asked them about; they always took the moral high ground; and they expected that they would always use a condom. They thought that they understood themselves, their preferences, and what actions they were capable of. But as it turned out, they completely underestimated their reactions.

No matter how you look at the numbers, it was clear that the magnitude of underprediction by the participants was substantial. Across the board, they revealed in their unaroused state that they themselves did not know what they were like once aroused. Prevention, protection, conservatism, and morality disappeared completely from the radar screen. They were simply unable to predict the degree to which passion would change them.

Image waking up one morning, looking in the mirror, and discovering that someone else—something alien but human—has taken over your body. You’re uglier, shorter, hairier; your lips are thinner, your incisors are longer, your nails are filthy, your face is flatter. Two cold, reptilian eyes gaze back at you. You long to smash something, rape someone. You are not you. You are a monster. Beset by this nightmarish vision, Robert Louis Stevenson screamed in his sleep in the early hours of an autumn morning in 1885. Immediately after his wife awoke him, he set to work on what he called a “fine bogey tale”—Dr. Jekyll and Mr. Hyde—in which he said, “Man is not truly one, but truly two.” The book was an overnight success, and no wonder. The story captivated the imagination of Victorians, who were fascinated with the dichotomy between repressive propriety— represented by the mild-mannered scientist Dr. Jekyll—and uncontrollable passion, embodied in the murderous Mr. Hyde. Dr. Jekyll thought he understood how to control himself. But when Mr. Hyde took over, look out. The story was frightening and imaginative, but it wasn’t new. Long before Sophocles’s Oedipus Rex and Shakespeare’s Macbeth, the war between interior good and evil had been the stuff of myth, religion, and literature. In Freudian terms, each of us houses a dark self, an id, a brute that can unpredictably wrest control away from the superego. Thus a pleasant, friendly neighbor, seized by road rage, crashes his car into a semi. A teenager grabs a gun and shoots his friends. A priest rapes a boy. All these otherwise good people assume that they understand themselves. But in the heat of passion, suddenly, with the flip of some interior switch, everything changes.

The experiment at Berkeley revealed not just the old story that we are all like Jekyll and Hyde, but also something new—that every one of us, regardless of how ‘good’ we are, underpredicts the effect of passion on our behavior. In every case, the participants in the experiment got it wrong. Even the most brilliant and rational person, in the heat of passion, seems to be absolutely and completely divorced from the person he thought he was. Moreover, it is not just that people make wrong predictions about themselves—their predictions are wrong by a large margin.

Most of the time, according to the results of the study, Roy is smart, decent, reasonable, kind, and trustworthy. His frontal lobes are fully functioning, and he is in control of his behavior. But when he’s in a state of sexual arousal and the reptilian brain takes over, he becomes unrecognizable to himself.  Roy thinks he knows how he will behave in an aroused state, but his understanding is limited. He doesn’t truly understand that as his sexual motivation becomes more intense, he may throw caution to the wind. He may risk sexually transmitted diseases and unwanted pregnancies in order to achieve sexual gratification. When he is gripped by passion, his emotions may blur the boundary between what is right and what is wrong. In fact, he doesn’t have a clue to how consistently wild he really is, for when he is in one state and tries to predict his behavior in another state, he gets it wrong. Moreover, the study suggested that our inability to understand ourselves in a different emotional state does not seem to improve with experience; we get it wrong even if we spend as much time in this state as our Berkeley students spend sexually aroused. Sexual arousal is familiar, personal, very human, and utterly commonplace. Even so, we all systematically underpredict the degree to which arousal completely negates our superego, and the way emotions can take control of our behavior. In behavioral economic terms, this cognitive bias is known as a hot-cold empathy gap and it occurs when people underestimate the influence of visceral states (e.g. being angry, in pain, or hungry) on their behavior or preferences.

Habit, Affect Heuristic. Herding, Sunk Costs and Confirmation Bias

But financial domination isn’t just about any old visceral state, it’s about the most deeply ingrained and complex visceral state of them all – sexual arousal. So, of course, it’s much more complicated than something as simple as a hot-cold empathy gap.

People are creatures of habit with narrow frames of reference. Pornography is habit forming, and habit is an extremely powerful cognitive bias. An automatic and rigid pattern of behavior acquired through repetition and associative learning, a habit occurs when actions become paired repeatedly with a context of event. Habit loops involve a cue that triggers an actual behavior and reward. For example, habitual drinkers may come home after work (the cue), drink a beer (the behavior), and feel relaxed (the reward). Behaviors may initially serve to attain a particular goal, but once the action is automatic and habitual, the goal loses its importance; i.e., popcorn may habitually be eaten in the cinema despite the fact that it is stale. For the financial submissive, achieving the reward (orgasm) becomes less important than the action (sending money to a dominatrix.) The financial sub’s habit may be the triggered by any of numerous cues – a video clip, a text message, or even an erotic image. Once ‘trained’ (habituated), habit overrides reason and the irrational spending of financial domination becomes normal. But how does a man develop a financial submission habit in the first place? Aside from underestimating the influence sexual arousal has on his decision making, there are several other cognitive biases that steer a man down the irrational path of financial submission.

The affect heuristic is a mental shortcut everyone uses when they don’t have the time or resources to reflect (such as when in the heat of passion.) In general, the affect heuristic informs a person’s decision by relying on good or bad feelings and thoughts that person may have relative to a stimulus. Affect-based evaluations are quick, automatic and are activated prior to reflective judgment. It’s no accident that financial domination goes hand-in-hand with unusual fetish fantasies. Men with vanilla sexual tastes may consider the benefits of sending money to a dominatrix as low and risks as high. On the other hand, a man with unusual sexual fetishes, instead of considering risks and benefits independently, may consider the benefit of overpaying a dominatrix that can play to his fetishes as high and risk as low, thereby leading to a more positive risk-benefit correlation than would be evident under normal conditions. For that fetish-aroused male, this decision making process can exacerbate two other cognitive biases – herd behavior and sunk cost fallacy – which can provide the mental inertia required to propel the irrational spending of financial domination down the path towards eventual habituation.

Herd behavior occurs when people do what others are doing instead of using their own information or making independent decisions. The idea of herding has a long history in philosophy and crowd psychology. It is particularly relevant in the domain of finance, where it has been discussed in relation to the collective irrationality of investors, including stock market bubbles. In other areas of decision making, such as politics, science, and popular culture, herd behavior is sometimes referred to as ‘information cascades’. In financial domination, social media provides a mechanism for herd behavior to influence an aroused man’s decision process. And make no mistake, financially submissive men are part of a larger heard.  A single tweet from a financial domme referencing a large tribute often beget more tributes (both large and small) from other men.

Sunk cost fallacy occurs when an individual continues a behavior as a result of previously invested resources (time, money or effort). This fallacy can also be viewed as a cognitive bias resulting from an ongoing commitment. For those 29% of men who view financial domination as genuine power exchange, commitment to that relationship underlies their sunk cost fallacy behavior. This view of power exchange, though widely assumed as valid rational for physical dominance/submission play, lies well outside the realm of traditional economic theory. In that sense, power exchange as motivation for financial domination is wholly irrational and reflects still another cognitive bias, confirmation bias. Confirmation bias occurs when people seek out or evaluate information in a way that fits with their existing thinking and preconceptions. For a man seeking an online dominant/submissive relationship, the belief that sending money to a woman is a surrogate for power exchange confirms a preconceived belief in the nature of the relationship. The submissive wants the money exchange to be about power because he wants the relationship to be about dominance and submission. From a behavioral economic perspective, confirmation bias exacerbates the illusion.

Time Discounting, Mental Accounting, and Self Control

Ceara Lynch once famously said, “Men do stupid things when they’re horny. But at the end of the day, they’re only responsible for themselves.” And of course what she’s really saying is that it’s not her fault if some men lack self-control and can’t stop sending her money. But there are two other biases that abet this lack of self-control – factors exploited not by Ceara Lynch, but by banks and money transfer platforms.

People mentally account for credit card purchases differently than they do for purchases made with cash. With credit cards, mental accounting decouples the purchase from the payment by separating and delaying the payment. This delay triggers a second bias, time discounting. In time discounting, present rewards are weighted more heavily than future ones. (Once rewards are very distant in time, they cease to be valuable.) Impulsivity and immediate gratification drive time discounting and to a large extend the use of credit cards for irrational economic behavior.

In the first section of this essay, I discussed how emotions grab hold of us and make us view the world from a different perspective. When we promise to spend our money wisely, we are in a cool state. But then the lava flow of hot emotion comes rushing in: a financial submissive gets a cue – an image, a video clip, a text message – and immediate gratification takes precedent to longer-term financial goals. And the time discounting and mental accounting biases associated with credit card and online money transfer platforms make self-control that much harder.

And so …

The 60% of people who think financial domination is about horny men doing stupid things are probably right. But that’s not to say financial submissives are stupid people.  They aren’t.  What they are is being influenced by cognitive biases we all have; biases that they’re largely unaware of as they act, but that are there nonetheless. These biases are observable, testable, and repeatable. And in the case of financial domination, those biases interplay with each other in the most complex of situations:  online sexual fantasy play involving socially restricted or prohibited kinks.


  1. A recent Twitter poll asked, “Which of the below do you think best describes financial domination?” Of 145 respondents, 11% chose ‘Overpaying for attention’, 29% chose ‘Genuine power exchange’, and 60% chose “Horny men being stupid.”
  2. For those interested, a complete list of known cognitive biases and behavioral economic concepts can be found in Part One: Selected Behavioral Economic Concepts” of Alain Samson’s The Behavioral Economics Guide 2014

Berkeley Questionnaire and Results

Questionaire 1Questionaire 2

Questionaire 3

2 thoughts on “The Irrational Economics of Financial Domination”

  1. interesting article. I’n my case I think it comes from deep submissive roots. My mother would catch me kissing my girlfriends feet when I was around 4. Always enjoyed spoiling women excessively and never thought it was a fetish. I had been used by a couple women in my past and came to realize deep down I thoroughly enjoyed it. The internet makes it easy to find greedy women to push these buttons. Finding a women like Ms Ceara who truly seems to relish this fetish has been a blessing. I’m sure it seems stupid to anyone that doesn’t have these tendencies but to each their own.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s