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After 20 years of being married, when newly-single Paul Oyer, a Stanford economist, found himself waiting for his first date set up over the internet, he couldn’t help but draw comparisons between the dating markets and the business markets he had studied himself. The fruit of this contemplation and his experiences on the online dating circuit is his book: Everything I Ever Needed To Know About Economics I Learned From Online Dating.
In the spirit of Valentine’s Day, The HinduBusiness Line caught up over a skype chat with Oyer, who tells us more about his book, the parallels between online dating and business markets. Paul Oyer is the Fred H. Merrill Professor of Economics at the Stanford University Graduate School of Business. A former professor at Northwestern University’s Kellogg School of Management, he is the Editor-in-Chief of the Journal of Labor Economics .
“This book looks at economic theory, and hopes to teach it, in the context of online dating,” he says.
He gives the examples of some economic theories which he observed in action on online dating forums.
The first is Dale Mortensen and Christopher Pissarides’ Search Theory. He says that when a person goes out looking for a romantic partner, even on the internet, the amount of time one spends searching reflects a cost-benefit analysis undertaken on their part. Using their time doing this, instead of other things, is a search cost, like a market place, where a consumer holds on to his money, and takes his time to search for the best possible good he can get for his money.
The second is the concept of Thick Markets. Since there are no perfect substitutes, as no two people are the same, the abundance of participants online, like in a market, is its desirable characteristic.
Then, ‘cheap talk’ from Game Theory. Similar to markets where people choose to reveal only certain details, online users tailor their dating profiles to selectively reveal the truth.
“Men aren’t upfront about their height on online dating Web sites, because they know women prefer taller men,” he says.
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