You surely have days (or at least did when you were single) when you wonder how you will ever find the right life partner. Invariably, you come back to the same old realization: “I need the advice of an economist. An economist would know how to solve my problem!”
No? Not familiar? Well maybe you should give it a try. The dating world is a market and markets are what economists know best. When I recently began dating again and went searching for a new partner online, I saw firsthand that understanding economics can give you a leg up.
So I’m happy to share four ideas that were so insightful in the world of economics that they won Nobel Prizes – and how you can apply them to find the perfect mate online. In a nutshell, my advice is to go big, beware the assumptions that will be made about you, put your money where your mouth is, and settle.
Step 1, Picking a Site: Go Big
Pick a big dating online site. Or, in economic-speak, go to a “thick market.”
Potential life partners are like any other “differentiated good”: No two are alike. If you were to rank everyone on a given dating site in terms of how perfect a match they are for you, you are likely to find more people who are better matches if there are more people to choose from. It’s that simple (though actually making markets thick can be very complicated, which led to Al Roth’s 2012 Nobel Prize).
Drawing a parallel to the job market, consider an engineer looking for a position in St. Louis versus one looking in San Jose. There are lots of great jobs for engineers in St. Louis. But there are so many more engineering jobs in San Jose that a given engineer will, on average, find a job that better fits her skills in San Jose than in St. Louis. By the same token, you are more likely to find a partner to your liking on a large site such as Match.com or eHarmony than you are on a smaller site like Veggiedate.com or LargeandLovelyDate.com.
Step 2, Creating an Online Profile: Be Careful What You Say – People Make Assumptions
When I first posted my online dating profile, I listed myself as “separated” because my divorce was not final. While I thought “separated” meant “ready to move on happily to the next relationship,” I was told by many women that “separated” also suggests “emotional wreck still really bitter over recently failed marriage” or, worse yet, “testing the waters but may end up going back to my spouse.” This might explain why the response rate to my initial messages to women was not exactly overwhelming.
George Akerlof won the Nobel Prize in 2001 for explaining my problem. “Adverse selection” suggests that you should beware of hidden information. Akerlof described this in the context of selling a used car. He pointed out that people assume your car is a lemon unless there is a way to prove otherwise. People assumed that I, like so many separated men, was not emotionally ready to move on – that is, I was a relationship lemon.
So be careful what you say about yourself because people make assumptions. If you are in your forties and have never been married, people will assume you cannot maintain a long-term relationship. If you admit you like Nascar, people may assume you are a redneck. Your idiosyncrasies will be cute to your significant other someday, but they are negative stereotypes to people who don’t know you yet.
Step 3, Meeting in Person: Burn Money on Your First Date
I hate to shatter your illusions but online dating profiles are full of exaggerations and lies. Objective data show that men lie on dating sites about their income and their height while women under-report their age and weight. Anecdotally, I can tell you that many women whose profiles promise they are fun, optimistic, and “athletic and toned” are either liars or delusional. (As to what they might say about the accuracy of my own profile, I can only speculate.)
What does that have to do with economics? Economists think lying, or “cheap talk,” is just a rational way to influence others. Smart consumers should discount people’s statements on dating profiles because we all feel some pressure to be less than truthful ourselves.
A few dating sites abroad have started verifying information about height, income, and other objective claims. But what can you do if you can’t use such a site? What you ideally want to do is prove that you are rich (or whatever characteristic you want to highlight) by incurring some cost that those who do not have that trait would not be willing to incur. This idea of “signaling” won Michael Spence the Nobel Prize in 2001, though he focused on the higher education market rather than the world of romance.
A great example of effective signaling can be found in the movie “The Dark Knight.” The Joker burns a big pile of money to prove to his co-conspirators that his goals are broader than just making money. So, if you want to prove you really are rich, you could burn a big pile of money on the first date. Ironically, to an economist, the crazy actions of a maniacal and evil movie character seem like a great way to impress a date. But even economists understand there are social norms and that the money bonfire may not be effective. So you may want to use more conventional methods like wearing expensive clothes, picking up the check, tipping well, and not keeping the receipt.
Step 4, Choosing a Partner: Settle
I tricked you. I told you that I was going to help you find the perfect mate. But there is no perfect mate and, even if there is, you will never find that person.
Once you accept that, you can apply the ideas in “search theory” that won economists Dale Mortensen and Christopher Pissarides a Nobel Prize in 2010. Basically, they analyzed the economic consequences and trade-offs that people face regularly when deciding whether to accept the best option available or to keep looking. In the online dating world, this means that looking at another profile may unveil someone who will make you happier than anyone you know. When you think of it that way, you almost feel a responsibility to look at another profile. How can you sit here reading this column when the very next profile you look at could be the best match for you? But we all know that logic doesn’t work—we don’t spend an unlimited amount of time looking for “the one” because we also want to eat, earn money, and watch “Homeland” (well, we used to).
Settle. There, I said it. You don’t want to admit it. You love your mate and think he or she is the greatest. Or, if you are still looking, you are hoping you will find someone “perfect.” But, at some point, you should say to yourself (though I don’t recommend you say this out loud), “My partner is truly wonderful. If I kept looking, I could probably do better. But I have to earn a living, make dinner, walk the dog, and do a bunch of other stuff. So I’m going to settle for this person and move on with life. It could certainly be a lot worse.” An economist would say that, by doing so, you maximize your expected utility.
What happens to people who search too much – who can’t settle? Mortensen and Pissarides show that picky firms and overly choosy job seekers contribute to unemployment. When it comes to life partners, settling for someone really good is better than waiting for someone who is perfect and potentially being “romantically unemployed” for the rest of your life.
We economists have even more great dating advice to offer but let’s leave it there for now. The key is that dating is a market and you have to be in the market to succeed in the market. It worked for me. Through online dating, I found a wonderful and sweet girlfriend. So get out there and remember – go big, watch what you say, put your money where your mouth is, and then settle for less than perfection.
Paul Oyer is a professor of economics at the Stanford University Graduate School of Business and the editor-in-chief of the Journal of Labor Economics. He is the author of “Everything I Ever Needed to Know About Economics I Learned From Online Dating.”