Everything economics online dating
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Book review: Everything I Ever Needed to Know about Economics I Learned from Online Dating
When I set up my dating profile, I was upfront about my teenage children and my sweet but impish golden retriever. I admit it. I left out details — and lied. What led me to be honest on some parts of my profile and not others? We can find the answer in a branch of game theory known as cheap talk. A cheap talk framework considers the potential conflict between my preferences and those of the women I am trying to attract and lets us analyze, in a given situation, when and if it is sensible to hide information or lie outright.
Since what was true and what I thought would appeal to people were often the same, I could quickly fill in most answers. Game theory would say it all came down to utility: As much as we would all love to be loved for the people we are, things are more complicated. A woman and I can find each other attractive, but at the same time, she finds my favorite Internet video extremely unfunny, or feels she could never go out with anyone who checked a certain box regarding politics.
If I revealed my video and views, that woman would never agree to meet me in the first place. So I, like many others, hide these minutiae. Research shows that minor lying is prevalent on dating sites, with a typical person claiming to be an inch taller, about 5 pounds lighter, and a year or two younger. Unfortunately, profile inflators have a major impact on those of us who would like to tell the truth. Their lies lead all of us to discount claims as cheap talk.
But I prominently displayed two features on my profile — my teenage children and the big, friendly dog that is not so familiar with the concepts of personal space and hygiene — that would be big turnoffs to many people. When it comes to children and dogs, my interests need to be perfectly aligned with those of potential partners.
This is key to cheap talk models: The cooperative side suggests that the more genuinely aligned the interests of the provider and consumer of information, the more accurate the information will be. Lying — the noncooperative part of game theory — occurs far more often with baseline data we all share, like looks, income and age, where everyone wants to seem as attractive as possible.
But not everybody has teenagers or a hairy canine sidekick, which are non-negotiable. The logic that drives our online profiles also leads companies and their top managers to stretch the truth. One example was documented by Dartmouth economists Jonathan Zinman and Eric Zitzewitz, who found that ski resorts exaggerate their snowfall, especially during periods generally weekends when they have more to gain by doing so.
But just as Internet daters will exaggerate less if they think they will get caught, ski resorts tell the truth more when skiers can catch their lies. The proliferation of smartphones has made it possible to question snow reports in real time. One SkiReport. More like 0. Corporate cheap talk is so common it extends all the way to top executives. But sophisticated shareholders are a lot like skeptical Internet daters.
The CEO, knowing the market will discount what she says, really has no choice but to inflate expectations. Similarly, stock analysts have also been widely identified as potential providers of cheap talk. By convention and SEC rules, the people who do these analyses are supposed to be isolated from people at the bank who handle the stock offering. Hsiou-wei Lin and Maureen McNichols studied in detail the recommendations of investment bank analysts at the time of new stock offerings.
Lin and McNichols showed that independent analysts were considerably less generous with their forecasts than analysts whose bank had a relationship with a company. As we would expect, however, the market assumes this exaggeration. As a result, the stock market is less responsive to the recommendations made by an analyst whose bank has an underwriting relationship with the company he analyzes relative to those made by a truly independent analyst. In addition to hanging on the words of analysts and CEOs, the stock market waits breathlessly for statements by one person in particular — the chairman of the Federal Reserve.
Statements by the Fed chairman have the potential to be cheap talk. The Fed can always say he or she plans to take certain actions regarding interest rates just to try to calm the markets, or that things look better than they do. But the Fed is often somewhat cagey about its intentions, providing ranges — rather than exact numbers — for certain financial targets. He found that if the Fed announced a precise target, such as that the inflation rate should be 2 percent, there might be situations in which it made this announcement when its true goal was 4 percent inflation.
There is less scope for manipulation when announcing a target range, such as 1 percent to 3 percent inflation. So cheap talk is more believable when a range is provided than when someone pins himself down with an exact figure. Perhaps, then, I should update my online profile to say that I am between 45 and 55 years old and between 5 feet 8 inches and 6 feet 2 inches tall.
So, how can you overcome cheap talk? An online dating site in Korea tried to find out. The site, essentially the Korean equivalent of Match. Over a five-day proposal period, participants browsed online profiles as in standard online dating, but could show only up to 10 people that they were interested in a date. In addition, some participants could offer a virtual rose along with two of their date requests. Next, there was a four-day period during which people responded essentially yes or no to the proposals they received.
The company then matched up the mutually interested pairs. Why did the site add the element of the virtual rose, and did it affect the outcomes of the dating arrangements? The answers are that a couple of economists talked them into it, and, yes, it had large effects. The idea of signaling something to someone you are trying to impress was modeled by Michael Spence in the early s and won a Nobel Prize in , and these economists wanted to try it out.
But note that what makes the signal work in this case is that it costs something. Participants who use the virtual rose have to give up something very important — the ability to show special interest in others. Signals become meaningful only if they are costly. When Michael Spence originally explained signaling, online dating had not yet been invented and he had to think of another venue for his idea.
He imagined a world where colleges exist only so that prospective employers can figure out whom they want to hire. In the model, there are exactly two types of people — those who are talented and those who are innately unskilled. But suppose that only the talented people will be able to graduate from college. They may learn nothing useful, but they show employers that they are talented and, as a result, they are eligible for higher-level jobs. In this model, education has solved our cheap talk problem.
A potential employee puts his money where his mouth is by spending a lot of time and money on his education to prove rather than just say that he is talented. As the Korean dating site results showed, the signaling idea applies quite nicely to the virtual rose. If a man or woman sent a standard proposal, the recipient accepted about 15 percent of the time. But about 18 percent of proposals that came with a virtual rose were accepted, which means sending a rose increased the chances of acceptance by about one-fifth.
Looking at who accepted which proposals provides more evidence for the credibility of virtual rose proposals. Tracking height, earnings, education and other characteristics, the company that runs the dating site can determine which participants will be viewed as more or less desirable. The virtual roses do not matter that much for the most desirable people. But the effect of a virtual rose is largest on the middle desirability group.
They are almost twice as likely to accept a proposal with a rose than one without. To them, being told in a credible manner that they really are particularly attractive is very meaningful. They have heard a lot of cheap talk in their lives, and they value someone backing it up. Or, put another way, the rose is a meaningful investment in the person because the sender had to give up other opportunities in order to send it.
These are effective ways to signal that you really mean what you say. Copyright Paul Oyer. All rights reserved. Skip to main content. Enter the terms you wish to search for. Insights by Stanford Business. Search the Insights section. Economics Corporate Governance Leadership. Paul Oyer: January 7, by Paul Oyer. Paul Oyer Amy Harrity. Oyer Video of Oyer. Share this http: For media inquiries, visit the Newsroom. August 16, Jonathan Levin talks auction theory, business education, and dinner-table economics.
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Everything I Ever Needed to Know about Economics I Learned from Online Dating Hardcover – January 7, After more than twenty years, economist Paul Oyer found himself back on the dating scene—but what a difference a few years made. But Oyer had a secret weapon: economics. Editorial Reviews. Review. Advance Praise for Everything I Ever Needed to Know About Economics I Learned From Online Dating: Lori Gottlieb, New York.
Book Title: Everything I ever needed to know about economics I learned from online dating. When after 20 years of marriage, Stanford economist Oyer found himself newly single, he turned to the internet to find love and found himself increasingly drawing comparisons between the online dating market and the business markets he studied every day.
The Case for Settling for Mr. A hilarious, thought-provoking, must-read manual for anybody who wants to find The One and learn why love and the economy make for highly entertaining bedfellows.
Official journal of behavioral economics explain online dating. Once a digital library of academic journals, by researchers who has ratings and methods of the following university. Everything i ever needed to three observations about online dating.
Everything I Ever Needed To Know About Economics, I Learned From Online Dating
Economic theories can really help you up your dating game. When the ratio of buyers to sellers is a constant, research shows pdf that the probability of successful matches between the two is significantly higher when there are more of both. After all, even if you have a 1: If you increase the pool size, it follows that more of your job candidates will be suited—if not perfectly suited—to a company looking to hire. A simpler suggestion from Oyer is to pick the biggest dating site you can find.
3 Insights About Dating From a Stanford Economist
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I am a sucker for cute book titles and anything to do with digital culture. Luckily, he agreed to the interview and this is the result.
Listen to our new podcast, 'The Last Continent'. Paul Oyer Paul Oyer. Below, we have an excerpt of that conversation.
Master online dating by thinking like an economist
When I set up my dating profile, I was upfront about my teenage children and my sweet but impish golden retriever. I admit it. I left out details — and lied. What led me to be honest on some parts of my profile and not others? We can find the answer in a branch of game theory known as cheap talk. A cheap talk framework considers the potential conflict between my preferences and those of the women I am trying to attract and lets us analyze, in a given situation, when and if it is sensible to hide information or lie outright. Since what was true and what I thought would appeal to people were often the same, I could quickly fill in most answers. Game theory would say it all came down to utility: As much as we would all love to be loved for the people we are, things are more complicated. A woman and I can find each other attractive, but at the same time, she finds my favorite Internet video extremely unfunny, or feels she could never go out with anyone who checked a certain box regarding politics. If I revealed my video and views, that woman would never agree to meet me in the first place.
What a labor economist can teach you about online dating
After more than twenty years, economist Paul Oyer found himself back on the dating scene — but what a difference a few years made. Dating was now dominated by sites like Match. But Oyer had a secret weapon: It turns out that dating sites are no different than the markets Oyer had spent a lifetime studying. The arcane language of economics — search, signaling, adverse selection, cheap talk, statistical discrimination, thick markets, and network externalities — provides a useful guide to finding a mate. Using the ideas that are central to how markets and economics and dating work, Oyer shows how you can apply these ideas to take advantage of the economics in everyday life, all around you, all the time.
Paul Oyer: What Online Dating Can Teach About Economics
The dating world is, in fact, its own market, with complex economic judgments taking place all the time. That is according to Dr. Some of those qualities might be age or attractiveness - and some are financial. Indeed, just go on popular dating sites such as Match. So, does that matter? Another study, co-authored by famed behavioral economist Dan Ariely, uncovered similar online-dating preferences.
Buy for others
Below, just in time for that love-related holiday coming up, Oyer shares some of the insight he gained through his own forays into the online dating world. On a dating site, lots of members mean lots of available potential matches. In the book, I use the example of buying a pair of jeans: If you have an hour to shop, would you rather be in Manhattan or in a rural community? The thing is, you can be a generalist dater or a specialist dater. If you choose to be a specialist dater, you should know that these targeted sites are more viable options in densely populated areas, where there are a larger number of people with special interests in the region and there are enough people to provide an appropriately thick market. In your book, you explain that dishonesty in an online profile makes economic sense.
How Economists Would Fix Online Dating
Paul Oyer is The Fred H. Paul does research in the field of personnel economics. In addition, he is the author of two books published in Everything I Ever Needed to Know About Economics I Learned from Online Dating is an entertaining and non-technical explanation of numerous key ideas in microeconomics using examples from online dating , as well as labor markets and many product markets. When not teaching or doing research, Paul runs, swims, skis, hangs out with his two college-age children and walks his flat-coated retriever.
When Stanford professor and economist Paul Oyer found himself back on the dating scene after more than 20 years, he headed to sites like OkCupid, Match. As he spent more time on these sites, he realized searching for a romantic partner online was remarkably similar to something he'd been studying all his life: Oyer, who is now happily in a relationship with a woman he met on JDate, recently sat down with The Date Report to talk about all the actually interesting dating tips you slept through during your freshman econ class. People end up on online dating sites for a variety of reasons—some are looking for casual hookups with multiple people, while others are seeking monogamous, long-term love. Knowing what you're looking for will help inform the way you describe yourself to others. During a recent segment of the Freakonomics podcast , Oyer analyzed the OkCupid profile of radio producer PJ Vogt, whose jokes about drinking and whose "casual attire" profile photos made him potentially less appealing to women looking for something serious. Oyer's advice to Vogt:What Behavioral Economics Can Teach You About Online Dating - Logan Ury