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Matching Markets in Online Dating

In this news article from The Economist, digital dating signs are deconstructed in terms of economics and algorithms to predict and facilitate mutual attraction. The authors compare searching for “the one” to hunting for a job. Each job has pros and cons just as every person has his or her own strengths and weaknesses. Thus, finding the right one becomes “a matter of complicated trade-offs”. The distinguishing factor that makes such exchanges different from other transactions is that both parties care about to whom they are matched. Here, supply and demand are not balanced by price, but by information. The more knowledge that both parties have of one another, the better the likelihood of a good match being made. For instance, if two potential partners learn that they have a lot in common, there is a greater probability that they will commit to staying together with one another. Conversely, if a crucial piece of information is missing (such as when neither party is certain that the other is interested), the match may never occur due to fear of rejection. However, as the article insightfully points out, dating apps such as Tinder and Happn have devised technological ways to circumvent the awkwardness of unrequited love. They only reveal that a user likes another user when the feeling is mutual.

The article goes on to discuss the benefits and detriments of dating apps in a socioeconomic context. With new advances in technology, people can choose others on the basis of criteria such as age, sex, appearance, religion, etc. Though there is no perfect formula, a larger pool of potential partners has its advantages since “the best matching markets are those that are ‘thick’ with lots of participants”. More people give more options that increase the chances of finding a good match. However, if too many people are involved, then the market becomes difficult to navigate and the matchmaking process is hindered. The article also raises an interesting question of whether dating apps are strengthening the trend toward “assortative mating, whereby people choose to couple with those of similar income and skills”. It cites an estimate in which “the trend accounts for about 18% of the rise in income inequality in America”.

These points are related to our class discussion of matching markets in which marriage was listed as an example of an application. Online dating is a similar matchmaking process that may lead to marriage. Perfect matching would occur if each person could happily be paired with one mate. Shown below is an example of perfect matching (left, red=perfect matching set) and a lack thereof (right, red=constricted set) with six people, three male (blue) and three female (pink):Perfect Matching of Men and Women

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