Dating and Economics: Theory and Practice
While online this morning, I noticed an old friend had this away message up:
“My dad sent me the following email: “The hostess who seated us tonight, graduated two years ago from UCLA. She is very intelligent, and quite striking. I would suggest that you email her… The rest is in YOUR hands!” He cc’ed her on the email.”
Of course, I’m sure the first emotion that my friend felt was embarrassment, but I think that economics suggests that the father’s actions under the circumstances are actually a fairly efficient response to the peculiarities of the dating market.
One can view dating itself as a market. The men and women looking for partners are the participants in the market and the product they seek is some sort of long-term romantic attachment. Now there is one major detail that separates dating as an institution from a traditional market—the absence of explicit prices. Other then the obvious cultural taboos about paying for romantic relationships, the almost complete idiosyncrasy of each romantic relationship would prevent a price mechanism from ever working in the dating market. One could however, view the costs associated with dating for both sides the “price” of dating. This leads to the second major observation about dating as a market—most of the information we need about a person to make a good decision about their suitability is hidden from us and has to be uncovered over time. Because of this, the dating market will be characterized by significant “search costs,” a term economists use to differentiate markets like the stock market, where the security you want is easily accessible from markets like the used-car market where you might spend weeks trying to find the “right” car.
In a world of search costs, the free market creates institutions, like Carfax, to try and reduce those search costs. Online dating sites can be thought of as playing a similar role in dating markets. However, the dating market is still characterized by large search costs. Viewed in this light, the father in this story has actually reduced his son’s search cost in a way that is quite efficient because it involved no effort on the part of the son.
But the economics of the situation go deeper than that. As I discussed above, the main problem with the dating market is the information you need isn’t readily available at first and, often, for cultural reasons that information is not appropriate to glean directly. For instance, it is highly relevant to the girl here that the son in question went to Harvard and has a good job. It is highly relevant for the son that the girl graduated UCLA recently and is attractive. Now, you might say that he would have noticed her attractiveness at first so that’s not really information he needed passed along to him, but that raises another interesting point about the economics of dating. When one approaches a girl he does not know, he signals certain things. He obviously signals his attraction, but the nature of that attraction is unclear. Furthermore, the girl may perceive the directness as an indicator that he is looking for a short-term relationship (of course a full model of dating would require a model of “hooking up” and its interaction with the longer term dating market, but that’s totally unnecessary for the point I’m making here). The father making the introduction circumvents these problems, and by copying her on the e-mail allows her to anticipate the ensuing call, reducing some of the tension and uncertainty that characterizes the process. Finally, the whole interaction signals a family dynamic that may be very appealing to someone in the dating market. So embarrassment might be the natural reaction, but I actually think this situation, if readily replicable, would be a highly effective means of dating.