Paul Oyer Paul Oyer. Below, we have an excerpt of that conversation. And so I started online dating, and immediately, as an economist, I saw this was a market like so many others. The ending of my personal story is, I think, a great indicator of the importance of picking the right market. We work a hundred yards apart, and we had many friends in common.
And so I started online dating, and immediately, as an economist, I saw this was a market like so many others.
The ending of my personal story is, I think, a great indicator of the importance of picking the right market. We work a hundred yards apart, and we had many friends in common.Online dating and its global impact - The Economist
And it was only when we went to this marketplace together, which in our case was JDate, that we finally got to know each other.
I was a little bit naive. And I suggested that I was newly single and ready to look for another relationship. If it had dragged on for years and years, it would have gotten really tiresome. There are many other examples in online dating where that idea applies as well, and the nice thing about being separated is, while that signals you might be a lemon, unlike many other signals, this one passes with time.
A really good example of this is unemployment. A lot of people are finding it hard to find a job even though the job market has revived.
And a lot of it is just bad luck. They lost their job when the market was really bad. The online dating market had a hard time getting up and going. It had a hard time getting critical mass, because there was an adverse selection problem initially.
What a labor economist can teach you about online dating
People made the assumption back in the s when online dating started that anybody who went to an online dating site was a loser who could not meet people the old-fashioned way. And only over time, as it became so obvious that the efficiencies of meeting people online were so overwhelming, did that stigma slowly break down, and the non-losers began to come onto online dating sites, and the assumptions people made that you were a loser if you were an online dating site began to go away.
You spend a lot of time talking about the parallels between the job market and the dating market. And it just says, look, there are frictions in finding a match. If employers go out and look for employees, they have to spend time and money looking for the right person, and employees have to print their resume, go to interviews and so forth. And those frictions are what leads to unemployment.
The Economist Documents the Rise of Online Dating
That was a critical idea. By the same exact logic, there are always going to be plenty of single people out there, because it takes time and effort to find your mate.
These frictions, the time spent looking for a mate, lead to loneliness or as I like to say, romantic unemployment. The first piece of advice an economist would give people in online dating is: He used to work as an economist for Shell and the World Bank.
And then he went into the sort of thing we do, explanatory journalism. And I imagine it's somewhat hard to come up with a topic every week in the Financial Times. And so he had this great idea, this jokey idea. I will do a "Dear Economist" advice column, love and sex advice for the heartbroken.
In many ways, love seems to be totally divorced from economics. But then you realize - well, the stakes are high. This is something that matters to us.
We're dealing with scarcity. I mean, if you're dating one person, at the very least, you don't have as much time to date another person. And you may well find that you can only date one person at a time. And something strange happened when he started to do this column. I mean, at first it was this character he was playing. But then real people started writing with real problems. And Tim started to think, you know, economics really does have something to offer these people.
It's simultaneously completely useless and irrelevant and somehow in some brilliant, hidden, genius way, keeps producing insights that are not necessarily obvious from the normal way that we think about things. We knew Tim was coming in and we asked all of you to send us your questions about love and sex and whatever else you wanted to ask Tim about.
And we got some of you on the phone with Tim so you could ask him directly for his economic advice. All right, so my question is - I'm a senior in high school, and I've never been on a date. Should I be worried about this? Arthur, can I just ask - what is it about not having been on a date that makes you worried? What makes you think you should be worried? It just seems that everyone else, you know, like - well, not everyone else but lots of people around me, you know, and, you know, I have a prom coming up, and I'm clueless about that.
So it's kind of - it's a little bit stressful. Well, Arthur, I think you are the victim of what behavioral economists call hyperbolic discounting, or more simply, you're taking a very short-term perspective. So you've really missed the first 10 percent of your possible dating experience. And let's be honest, it's not the best 10 percent, is it? I mean, dating when you're a teenager, it's not that great. There are all kinds of inconveniences. You don't have your own place.
And you don't really know what you're doing. In any case, economists counsel that you shouldn't worry about sunk costs. You can't go back in time and have a date when you're 15 anyway, so don't worry about that. I would just be inclined to crack on with things.
Are you planning to go to college? Yeah, well, experience suggests it's going to get a lot more exciting from then on in. I think a lot of people have that feeling. I could give you a piece of advice specifically about the prom if you're interested. And this is a discovery that was one of the first discoveries made in behavioral economics.
And loss aversion is a really disproportionate anxiety about stuff that doesn't matter very much. You're going through it again and again. And you've forgotten about it really quickly. So now let's think about prom night. What are the gains of a prom date that goes well versus the losses from a prom date that doesn't go well or you ask someone to the prom and they say, no?
Well, actually, you weren't going to have a prom date anyway if you didn't ask. So the cost of asking somebody and being refused is actually really quite small. It doesn't feel good, but it's no big deal, whereas you never had the date before, so - hey, if this date goes well, this could be the start of something really big for you.
So remember loss aversion when you are weighing out these two choices. I can't tell you what to do, but I can tell you you're probably taking the downside risk too seriously and not thinking enough about the potential upside.
All right, one problem solved. If you're just tuning in, Dear Economist is taking advice for the lovelorn. I guess my question is kind of long. My name is Russell, and I'm polyamorous. I'm married, but I also have two close other loving partners who I share my life with. And in turn, she also has other partners of her own. And in fact, we live with one of her boyfriends.
A core tendon of polyamory is the concept of abundance. And love is abundant, and you can share it with whomever you want, whereas monogamy concentrates on scarcity. So I'm just curious to hear the economist's thoughts on the idea of scarcity and abundance in love and then what economic benefits or detractors could arise from society thinking abundantly about love in this way.
So Russell, economics is often described as the study of scarce resources. So in a way, you would think that an economist was the wrong person to analyze this situation of abundance that you find yourself in. I'm sure a lot of listeners are contemplating that abundance right now. What I would say is that love may be boundless and abundant, but time isn't. So the challenge that I'm sure you're well aware of having to manage is splitting your time between your multiple partners.
Now, there is actually an economic theory that is related to this. It was developed by Gary Becker, Nobel Prize-winner in economics. And he developed an idea of how many children you might want to have. And what Becker said is there's a trade-off here because each additional child that you have is going to divide your time and your attention.
You're going to have to cram them into a smaller house. They're going to have to share rooms, or you might have to move into the suburbs, somewhere cheaper, further away from where the job is.
You can't afford to spend so much time with them.
Economist online dating
And so in Becker's theory, there is this trade-off between the quantity of children and the quality of children. And I would imagine you face the same trade-off. You have to decide what the optimal number of committed partners is. You say that love is abundant and can be shared in a transparent way, but actually, your behavior is not totally consistent with that because you only have, I think - what?
Your wife has a few committed partners. Why not 5 billion? I mean, there are 7 billion people on the planet. Why not love all of them? Actually, the answer is yes because what I discovered is trying to be able to have, let's say, more than three partners was absolutely impossible, at least for my own relationships. Tim is right in that I constantly have to be able to balance my time and be able to schedule and coordinate my time with my partners so that I can be able to have a meaningful relationship.
Otherwise, it just kind of degrades over time, and it's not something that's worthwhile or meaningful. Russell, this is something I love about economics. So I know very little about polyamory. This is a theory that Gary Becker developed almost half a century ago, and yet it delivers a result that you find persuasive.
It starts to get very difficult, when you have too many, to spend any amount of time on any one of these things. I mean, your question, seems to me, implies that you're trying to find the perfect match because only if you were trying to find the perfect match would you expand and have, you know, one app and then a second app and a third app and a fourth app.
Because if you're actually just trying to converge on good-enough, you'd probably want to focus. I think what I'm trying to optimize here is - if I'm going to spend time - you know, I'm going to set aside a Thursday; we're going to come up with a time; we're going to find a place; I'm going to get on the train; I'm going to sit down for a drink and have to meet this person - I want to make it worth my time.
I want to make sure that I'm - I don't want to waste a Thursday. The scarce resource here is not men. The scarce resource is Thursday. What you really need to be doing is finding out a way to have a date-like experience before you have the date because the date-like experience is what you really - you don't need to look at a thousand guys online. What you need to do is have five almost-dates to save on the actual date, which is the really scarce resource. So what you need to do is you need to have some app that lets you, say, look at paintings in the Metropolitan Museum together and talk about them or watch a film together online and talk about the film online - and as you very quickly find out then whether there's a match or not.
Well, hypothetically, I could ask any guy - hey, before we decide to go to this bar in Williamburg next Thursday, how about instead we Skype for 15 minutes?
And I think I would know what I need to know from that Skype conversation, but it's an ask that no one else is asking for.
I think that you should stick to this. Do you know why I think you should stick to this? Yeah, you know that.
But here's the thing - because wouldn't it be interesting to find the guys who would actually exceed to that request?
This is actually your - we've already discussed, there's no shortage of guys out there. There's lots and lots of guys out there. The question is trying to find the right one. And so you're effectively setting up what Michael Spence, Nobel Prize winner in economics, would call a screen. So you're saying, all I want from you - happy to date - all I want from you is 15 minutes on an internet connection to talk.
Thank you so much for having me, and I feel like I learned a ton. I'm so excited to annoy all of Brooklyn with my Skype requests. This is how we left the show in , just sort of a fun way to think about economics in our real life.
I did not think that anyone would take the advice seriously. But Andrea Salenzi, the last voice you heard - she did take it seriously. Shortly after the show aired, Andrea started to date via Skype. And in her own podcast, "Why Oh Why," she told the whole story of how it worked out. Let's hear a little clip. Laughter No, it's an economist's idea.
But it was my idea to take dating advice from an economist So that's Mike, who became my boyfriend. The first conversation we ever had was recorded for the show. I even put sentimental music under it. That's how you know I like him. I would love to meet you and, like, actually, like - I couldn't hear a lot of what you were saying. So I was, like, kind of, like, maybe not actually answering your questions. Our first real date was to a dive bar. I went home with him.
And that night he asked if it would bother me if he kept a light on. He was about to finish his book. I remember falling asleep to the sound of a page turning, knowing that this was unlike anything.
Andrea and Mike moved in together. They planned a whole life together. And then after a couple of happy years, their relationship ended suddenly. Listening to your last podcast was kind of surreal. I was like - yeah, Andrea. Yeah, that name rings a bell. And then I was like - oh, I remember. And then to just to listen to it all - I was like, I - I feel like I have, at least indirectly, broken your heart.
And for this, I could only apologize. I won't spoil the whole story. The podcast is well worth listening to. It's called "Why Oh Why. Episode 8, How Will I Know?
It's one of my favorites. We are always looking for stories of how economics plays a role in your life, for good or for bad. Send us an email, planetmoney npr. Today's update was produced by our intern, Daniela Vidal. We're also looking for our next summer intern. Sorry, Daniela, we plan ahead in this business. It is a great gig.