Everything I Ever Needed to Know About Economics I Learned from Online Dating

by Paul Oyer

Everything I Ever Needed to Know About Economics I Learned from Online Dating

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NPR Summary

A divorced economist uses his experiences with online dating to explain modern microeconomics, describing how the behaviors that drive online dating mirror those that drive other markets and offering advice on both fronts.

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Excerpt: Everything I Ever Needed to Know about Economics...

Many people believe there exists a single person who is their perfect partner or "soul mate." That may be true, but then I certainly hope that my soul mate does not live in a remote vil­lage in India. Suppose that my soul mate was born, like me, in the 1960s. Limiting myself to women who are still alive, and assuming that half of them have already met their soul mates, I have perhaps 200 million potential partners. If I meet two potential partners a day, there's a 50/50 chance I will find my soul mate within a quarter of a million years.

OK, the strategy of meeting every woman I can until I find my soul mate doesn't sound too promising. So what's my best alternative? If I accept that I won't meet "the one," when should I think I've met the best one available, given the amount of time and effort I can reasonably allocate to look­ing for a partner?

Let's start by thinking of a day in my life. At the time of this writing, I am not seeing anyone seriously. So here is a partial list of things I hoped to accomplish today when I woke up this morning: meet (or at least connect with) my next life partner, do some analysis for an academic paper that I am working on, do the New York Times crossword puzzle, get updated on the news through the newspaper and NPR, eat something truly delicious, exercise, spend some quality time with my children, walk my dog, and practice the piano. I could actually go on and on, but let's start there.

The more of those things I accomplish today, the happier I will be when I go to sleep tonight. In economist terms, doing more of those things (and, if I'm lucky, having some other unexpected good things happen) will make my utility higher when I go to bed tonight. As I go through my day, I'm mak­ing thousands of little decisions. What will I eat? Should I play that piano piece one more time? Should I run one more regression, or am I convinced my economics paper is correct? Each one is driven implicitly by what I think will make me happiest.

I will often have to make decisions that will affect my util­ity in unpredictable ways, though, so some of my end-of-day utility will be higher or lower than I expect when I decide what to do.

So now consider me, sitting in front of my computer screen, reviewing profiles on OkCupid or inspecting the e-mails that OkCupid sends me suggesting particular women. I spend quite a bit of time doing such perusing, as well as contacting and following up with women. To be per­fectly honest, I would rather not do that. I have a lot of other things I would rather do (or feel I should do) with my time, as you may remember from my ambitious list of plans. But I will review another profile if I think the additional utility from the chance that that person will become my life partner outweighs the additional utility I will get from using the time in some other manner.

This idea of utility is simultaneously one of the most abstract and intuitively appealing concepts in economics. It's just an economist's way to keep score of how happy some­one is. If I have a satisfying long-term relationship, or even a good first date, that makes me happy—it increases my util­ity. So I spend time on OkCupid in the hope that I will meet someone who will someday increase my utility.

We are all constantly making decisions that maximize our expected utility. You are, in fact, doing this as we speak; at some level, you're asking yourself if you would be happier if you continued reading this book than you would be if you put it down and did something else. Notice that I said you are maximizing your expected utility. This is because you have to make some choices when you are uncertain about how they will pay off. You may regret them later, but you essentially are making a lot of best guesses about how your decisions in the present will impact your utility in the future.

Search models in economics analyze the trade-offs that people face regularly when deciding whether to accept the best option available or to keep looking. In the online dating world, this means I know that looking at one more profile creates some chance that this person will turn out to be the absolute love of my life and will make me happier than any woman ever could. When I think of it that way, I almost

feel a responsibility to go look at another profile. How can I sit here writing this book when the very next woman I look at on Match.com could be the best match for me? But we all know that logic like that doesn't work—we don't spend an unlimited amount of time looking for a perfect match.

We settle. There, I said it. You don't want to admit it. You love your mate and think he or she is the greatest. Or, if you are still looking, you are hoping you will find someone "perfect." But you won't. I don't want to burst your bubble, but you just are not going to find the perfect match. Even if he or she is out there, you almost definitely won't find that person. At some point, you will say to your­self (though I recommend you do not say this out loud), "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."

Reprinted by permission of Harvard Business Review Press. Excerpt from Everything I Ever Needed to Know About Economics I Learned from Online Dating by Paul Oyer. Copyright 2014. All rights reserved.

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