Book Review: Everything I Ever Needed to Know about Economics I Learned from Online Dating

One of the side benefits of online dating is that it is a good source for finding interesting reading material. Some of the sites ask the question, “What was the last book you read?” Of course, I have to weed through a lot of answers that are “Fifty Shades of Grey” and “Eat Pray Love”, until I occasionally find something that interests me. Most of the time, these books will go onto my Amazon private wish list, because I have a long list of books that I’ve started and would like to finish, before I start a new one.

About a month ago, I came across a profile on eHarmony that mentioned a book called, “Everything I Ever Needed To Know About Economics I Learned From Online Dating”. This book went straight to my “Download Free Sample” list on Amazon. After I finished reading the free sample the same day, in one sitting, I knew I would be purchasing this book.

I purchased the book on February 26, and I finished it today (March 12), just over two weeks later. That is very good for me, even for a 256 page book.

I enjoyed reading most of the book. Technically, it’s a book about economics for the layman, using online dating as a teaching aid. But, a good portion of the book discusses online dating, and that is the part that interests me the most. I’ve just reached my ten year anniversary with the dating sites, having created my JDate, Match, eHarmony, OKCupid, and POF profiles back in 2006. So this is a topic that I can really relate to!

The author is Paul Oyer, an economics professor at Stanford, who suddenly found himself fortysomething and single in 2010. When he started dating after many years of marriage, he realized that Internet dating seemed to follow the laws of economics, so he started taking notes, which eventually became this book.

Since my primary goal for this book review is to entertain, as is my goal for my entire blog, I will pick out parts of the book that I found most entertaining, and share those with you. I will also write about how parts of the book relate to me, because I like to blog about myself.

The author mentions that he had a regular place where he met potential dates. It was a coffee shop called “Cafe Borrone”. I liked this. I also have a regular place: Starbucks.

The author discusses how the process of finding a partner is a specific example of search theory. For those of you who think the process of finding your soulmate on a dating site is not unromantic enough, consider this. Let’s assume there is a soulmate for you, out there in the sample of people of the appropriate sex who are age appropriate and not already married. He estimates that there are 200 million such potential partners on the planet. With some simple math, he concludes that the probability of finding your soulmate is 50%, assuming you have two meetings with potential partners a day, every day for the next 250,000 years!

OK, now that we’ve established that for all practical purposes it’s impossible to find your soulmate, you’ll have to settle for the best you can do, which is to find the best one available, given the limited amount of time and effort you can reasonably expend in the search. The key is knowing when to stop, when you’ve found “the one who is good enough”. See what I mean by unromantic?

Every minute spent looking for a potential partner is time that might otherwise be spent doing something enjoyable or useful, such as reading a good book, socializing with friends, or, in the author’s case, writing this book. But, there is a potential future payoff for looking at one more profile, because that profile might just be the one who is good enough. He says you’ll know you’ve found the one who is good enough when you can say, “My partner is truly wonderful. If I kept looking, I could probably do better. But I have to earn a living, make dinner, practice the piano, 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.”

Another point that I identify with in this stage of my life–I am 54–is that as we get older, we have less time to potentially spend with the one who is good enough after we find her. The longer the search process takes, the less time we will have. Therefore, we should be getting less picky as we get older. I will have to remind myself of this. I feel like I’m getting more picky.

There is a chapter that discusses an economic concept called cheap talk, which is technically a branch of game theory. The idea is that, as people say, words are cheap. You can describe all of your best qualities in your profile, but how does the reader know that you are telling the truth? This is made worse by the fact that many people lie about qualities such as age, height, and income, and the reader might assume you are lying too, even if you are telling the truth.

I can identify with this. I tell the truth about everything in my profile. When I say I am 5’8” I mean that is my honest height, with my shoes and socks off. Actually, I’m 5’8½”, but I don’t want to create a false impression by rounding up. Most women, based on Match profiles, want someone who is at least 5’10”. So my height of 5’8” is a dealbreaker for most of the women in cyberland. I suspect that their expectations are distorted by men who lie about their height. Marco Rubio says is is 5’10”. I’ve seen him standing next to the other candidates. He’s not 5’10”, even with his platform shoes on. It’s his fault!

There is discussion about whether it is better to be a big fish in a small pond, or a small fish in a big pond. An example of a big pond would be Match, the phone book of dating sites, A small pond might be VeggieDate. In the small pond, you will find a smaller set of potential matches, but you know they will satisfy what you think are your important criteria, for example, being vegetarian.

It is estimated that five percent of the population is vegetarian. Limiting oneself to a vegetarian partner rules out 95% of possible matches. In an average-sized city, this would result in a very small number of potential matches within driving distance. In a small town, the nearest match might be hours away. One might have success on a discriminating dating site like this in a densely populated area such as New York City. But, how many New York Cities are there?

His conclusion was that it’s better to choose the big pond. And let go of what you think are important criteria, like being a fellow vegetarian. You can only know that two people have a spark after meeting in person, and it’s much less likely to find such a person if you limit yourself to a small set of matches on VeggieDate. And how important is it really, that you both eat the same food?

The economic theory that is relevant for the big fish or big pond scenarios is called thick versus thin markets. It has applications outside of dating sites, and that’s all discussed in the book.

There is an interesting economic concept called signalling. Signalling can be used to circumvent the problems of cheap talk. For example, if you contact someone and say, “Your profile really stands out for me. It’s the best profile I’ve seen this year,”, even if it’s true, your contactee will assume you are lying. As women say, “I bet you say that to all the girls.”

Signalling provides a way to show you really mean it. The idea of signalling is that you show you really mean it by doing something for that person that costs something, and that you can’t do for everyone. A Korean dating site has a feature that allows you to sent a virtual rose. But, it only allows you to send two roses. if someone receives a rose, she knows that you liked her enough to use your valuable resource on her. Match used to have a similar feature that allowed users to send a VIP email. You would only be allowed to send a small limited number of VIP emails, something like one per week.

Sending someone a birthday card used to be an example of signalling. First, you would need to remember the person’s birthday. You would drive to the Hallmark store, browse through cards until you found one that was appropriate, write something nice on it, put a stamp on the envelope, walk to the mailbox, and send it out. This was something that had a real cost, and made the receiver feel good. It was an effective signal.

With Internet technology, there is now a shining example of the anti-signal: Birthday wishes on Facebook. In today’s Facebook-centric world, you’re likely to have your friend’s birthday automatically added to your calendar. If that’s not enough, when the day arrives, you will get a notification on your phone. You are then prompted, PROMPTED, to quickly send a birthday greeting and write “Happy Birthday” on her wall. This takes a maximum of about ten seconds. And if you do as many people are doing these days, and write merely “hb”, it will probably only cost you about four seconds out of your day. Anti-signal!

Another discussion that I enjoyed was about the economic concept called positive assortative mating. That sounds like a mouthful, but what it means is that likes tend to pair with likes, and they do well together in a variety of circumstances. What is counter-intuitive about this is that people who seem to be less desirable, perhaps because of their plain looks, low income, or low level of education are usually more desirable by other people with similar levels of these qualities. People want or feel comfortable with someone like them.

I can identify with the concept of positive assortative mating, because I search for profiles of women with at least a four year college degree, and preferably a graduate degree. I’ve often felt guilty about this, and wondered if I was a bit snobby about it. But, now I understand that I’m just looking for someone like myself, and based on the theory, that I would be more likely to get along with such a person. On the other side of the double-edged sword, I know that I have to get the idea right out of my head that I’ll ever find a suitable partner who looks like Christie Brinkley. It didn’t work for Billy Joel, who apparently didn’t study economic theory.

There is so much more that I enjoyed in this book, but in the interest of keeping this review short enough so that people will read it, I’ll close with a short discussion of one more economic theory that is applicable to online dating, adverse selection.

Adverse selection has to do with hidden information. A good example is used cars. People are often afraid of buying a used car because they assume that there is hidden information: A defect in the car that is not apparent on inspection or a test drive, but will show up after the car is purchased and driven for a while. In other words, the car might be a lemon.

In the early days of dating sites, there was a stigma associated with them. People assumed that only undesirable people had to join a dating site. An online profile might look good, but there must be hidden information, because otherwise, why would this person be on a dating site?

This stigma has largely disappeared, as online dating has become more mainstream. In fact, a recent study by psychologists confirmed that this stigma is effectively gone. And if a psychological study confirmed it, it must be true. (I read this on the Internet.)

However, adverse selection does still come into play, in more specialized ways. For example, if a man indicates on his profile that he is separated, even if there is no chance of reconciliation, even if he has moved on emotionally, and perhaps he’s just waiting for the papers to be filed with the courts, women might assume there is hidden information. He might jump back into bed with his wife at any time. He’s an emotional wreck looking for a temporary “rebound woman” to help him these tough times. Or if a woman indicates that she’s 50 years old and has never been married, a man might assume that there is hidden information that would show she is commitment phobic, or perhaps has a psychological flaw, even though (unbeknownst to him) she might have been in a long term relationship that wasn’t marriage. But, because of adverse selection, these people wouldn’t be given a chance.

Finally, a particularly worrisome example of adverse selection is the online profile that’s been there for a long time. If someone has had a profile for many years, and is still not in a relationship, there must be something wrong with him. At least that’s what readers of his profile will assume, based on the theory. The author reveals that he partook in online dating for four years, from 2010 to 2014, before he finally met the one who is good enough on JDate. His dating advice, at the end of the chapter on adverse selection is this: “If someone has been active on a dating site for a long time, STAY AWAY.”

In what year did I say I created my dating site profiles? Uh oh.