The modern dating world is much different as compared to the one in which our parents grew up. Thanks to technology, the marketplace for dating has been completely transformed. Traditionally, the set of people a young, eligible lady or gentleman would date included family friends, coworkers, classmates, and sometimes, someone they actually met by chance in the street. Nowadays, you basically have access to any individual with a smartphone within a 60-mile radius. To understand this transformation, you need to learn about the economics of dating. This is because there are many theories of economics that apply to it. Read on to learn about them.
The Dating Scene is Basically a Matching Market
Economists refer to dating scene as a matching market. The difference between a regular market and matching market is crystal clear. In a regular market, you don’t care who you are dealing with, as long as you get what you pay for or you get the payment for whatever you are offering. But in a matching market, you really want to make the deal with the person, and you want the other person to feel the same way about you. This is true in the dating pool.
Coase Theorem
In terms of probability, nowadays you have access to more people thanks to technology and modern dating. Because of this, you are more likely to find someone you are compatible with. You can find your dream “one” from the large pool of people looking for soulmates. Economically, this can be viewed as reducing asymmetric information and trade barriers in terms of the partner variety that is available. Going beyond the reduced trade barriers and basic probability, Coase Theorem may also apply to modern dating. It states that when there are externalities, if there is free trade and low transaction costs, then bargaining will lead to a Pareto efficient outcome no matter the initial ownership, or in terms of dating, relationship status. In other words, you are likely to end up with the right person eventually even if your current date is not your “dream” one. Learn more about the Coase Theorem at JC Economics Tuition.
Prisoners Dilemma
One of the most unfortunate consequences of modern dating and technology is the prisoner’s dilemma. The prisoner’s dilemma is where two rational persons don’t cooperate with one another in order to achieve the optimal outcome. In terms of dating, this means achieving a solid relationship. In modern dating scene, with the evolution of apps, technology, and phones, many people don’t want to be the first person to exit the dating market due to the fear of the other individual not existing, either.
Zero-Sum Game
In economics, the term zero-sum game is a situation where each participant’s losses and gains end up being equal to zero and ultimately cancelling each other out. This concept can be easily applied to dating. In many cases, dating is a zero-sum game because both individual gain and lose things throughout dating, but they eventually end up alone again due to the unintended negative consequences of modern dating scene, e.g. the prisoner’s dilemma, asymmetric information, a skewed indifference curve, decision fatigue, etc.
No one likes to think of the dating pool as a marketplace simply because it implies that the dating scene is about measuring the “value” of prospective partners until you find one that is your equal. The concept may seem cold, but in reality, the economics of dating markets clearly matters and there are certain principles of economics that do apply there.