What you don’t know before going on a date…
Since I am currently involved in a startup company that is designing an online-dating mobile app for professionals and college students, I had the opportunity to become an insider of the dating market. When designing the app, I proposed that we should have the “Chat” function restricted to less than 5 users or only one user that matched with you. The main reason for such design is to prevent one party from having communications with numerous users to “select” while the other party is devoting all his/her energy on the other side and eventually gets disappointed. The situation we tried to avoid is a representation of asymmetric information, and it plays an important role in the dating market, both online and in-person dating.
Dating Market
For a long time, people describe newly single people as “back on the market” and analyze dating with the terms of “supply” and “demand.” In older generations when cellphones are not widely available, people introduce potential suitable dates to friends or relatives and people go on blind dates. Other times, some agencies connect strangers. Nowadays, people use Tinder and other dating apps when they are bored, hoping to find new friends or dates. By swiping algorithm-generated profiles, you reject people through a left swipe and express interests through a right swipe. The article “Why Tinder is Better Operated Market Average Economy” explains how one can view Tinder as a free market where parties engage with one another by exchanging and investing time and resources to other parties without regulations. Although no actual money is spent and the exchange of goods is invisible in the dating market, it is truly a subtle one that connects people in a network and engages people in social and psychological rewards.
Sad Stories
While the dating market is extremely popular in recent years because people are obsessed with their cellphones and have no time in real life to build relationships with other people, there are many problems and unfortunate encounters because of those issues. One article talks about an awkward situation where Jack and Rose are people with two completely different tastes and lifestyles; however, because they don’t know each other very well and how they are somehow different from what they presented themselves, they both wasted a lot of time in going on the date and continuing this unmatched relationship when they can stop this from happening from the end of their first date. I have friends who told me their disappointing dates as well. Some people go on an actual date with a person who looks completely different from what it shows on the profile because the other party is proficient with Photoshop. I also have a friend who wasted so much time and energy on a Tinder boy she liked and thought to be “boyfriend” yet realized while she thought they are together based on their romantic chats, she is just another fish in a sea of Tinder matches for that boy.
Asymmetric Information
Those sad stories can be counted as the failure and unsuccessful transaction in this dating market. Several economic concepts play a role in this process, including adverse selection and sunk cost. In economics, adverse selection is a market situation where buyers and sellers have different information so that one person might participate selectively in trades that benefit him/her the most, at the expense of the other party. The market for “lemons” or asymmetric information theory is relevant to such a concept. According to the lecture and readings, we know that the asymmetric information theory suggests that sellers can possess more information than buyers. When this happens, there will be less incentive for sellers to sell high-quality goods and motive to sell low-quality items without lowering the price, leading to a decrease in quality for the entire market. Asymmetric information equilibrium states that “If all participants believe that some mix of goods will be sold then that mix of goods is sold.”
Because the dating market is usually riddled with confusing signals and rivals, people can fall into the trap of asymmetric information easily. In the beginning, one might try his/her best to find a date with commitment, matched personality, and can engage in meaningful relationships. However, there is a 50%-50% chance of finding a high-quality date and a low-quality date. After devoting time and effort to chat and conversation, she might encounter another problem, sunk cost. Because the time, money, and energy are already “spent” and cannot be recovered, it makes sense to continue the date when in fact he/she should stop this relationship. After exhausting communications with dates that might be relatively normal or somehow creepy, he/she might spend even less effort to attract new potential dates. And in the end, he/she will probably give up because of the continuing information asymmetry, where people have less incentive to show the weaknesses of themselves and more incentive to present the better-self on social media and dating app to give them more choices and power.
Implications
Dating can be interesting and exciting; unfortunately, it is not usually the case. When you are overwhelmed with false or incomplete information, disguise, information asymmetry, it is easy to give up in the process with exhaustion and disappointment. We are used to hiding our flaws on social media. However, to reverse this situation, we should first embrace our real-self and have the courage to commit to relationships with hopes. Online dating apps and dating agencies should also have regulations to reduce the consequences of asymmetric information, such as having restrictions to the number of people to chat with, the ability to label others with bad records as “liars,” and so forth. Although it is extremely difficult to prevent asymmetric information in dating, we can improve ourselves, implement restrictions, remember the idea of the sunk cost to make the dating experience better, both online and in real life.
Sources:
- https://www.theatlantic.com/family/archive/2020/02/modern-dating-odds-economy-apps-tinder-math/606982/#:~:text=The%20idea%20that%20a%20dating%20pool%20can%20be,analyzing%20dating%20in%20terms%20of%20supply%20and%20demand
- https://qrius.com/why-tinder-is-better-operated-market-average-economy/
- https://www.thebubble.org.uk/current-affairs/business-economics/the-dating-market-asymmetric-information-sunk-costs-and-how-to-find-a-peach/#:~:text=The%20dating%20market%20is%20riddled%20with%20asymmetric%20information%2C,many%20ways%20successful%20relationships%20defy%20fundamental%20economic%20logic