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Economic theory of dating
So how does that kind of mutual choosing option kind of mix things up?
PAUL OYER: Well, it does make the market a lot more complicated as I point out in the book.
We just buy one share of whatever company it is or we just buy one ton of soybeans or whatever it is.
But it can also be very rewarding, because you’re going to get a better fit, a better partner, as a result.
SARAH GREEN: Well, and, of course, there was one little wrinkle to this, which actually makes it more like the world of hiring, which I was so glad that you mentioned, which is that you are not just sort of shopping for a partner.
Download this podcast SARAH GREEN: Welcome to the HBR Idea Cast. I’m talking today with Paul Oyer, Professor of Economics at Stanford’s Graduate School of Business. SARAH GREEN: So Paul, I’d like to just kick off by talking a little bit about the economic concept of search costs.
He’s the author of the book, Everything I Ever Needed to Know About Economics I Learned from Online Dating. Can you just maybe describe what the concept is and how you’ve applied it to this idea of looking for a life partner?
PAUL OYER: There’s a big problem in the online dating world which is it’s very easy to say something, I’m interested in you or I have this certain characteristic, it’s showing it that’s more difficult.
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And so one thing that I found particularly interesting is when an online dating site in Korea stepped in and said, OK, how can we make this market work a little better?
But the world is not ideal and going about searching through people is very costly.
So online dating has actually provided a boon to the market, or at least from my perspective I think of it that way.
How can we make it so that when somebody says I’m interested in you, they really mean it.
And the way they did that is they use the what an economist would call the idea of signaling.