ROBERT SIEGEL, HOST:
Economist Paul Oyer devotes a chapter of his new book to the principle behind niche dating sites, the kind that Elise was just talking about. Oyer is a professor at Stanford Business School, and his book is called "Everything I Ever Needed To Know About Economics, I Learned From Online Dating."
And Paul Oyer, we should clarify at the outset that you were teaching economics long before your own adventures in online dating, yes?
PAUL OYER: That is true.
SIEGEL: But the experience that you and millions of others have had, you say, illustrates principles that you teach in economics.
OYER: Yeah, it does. And it does it in a nice context because I think a lot of people think about economics, and they think about money. And I really like teaching economics through online dating because it's a context where no money changes hands and yet so many of the ideas we, as economists, study are playing out.
SIEGEL: You do ackknowledge that in some cases, money may change hands...
SIEGEL: But you're not going to address those instances of online services.
OYER: There is a footnote acknowledging that there are certain types of transactions I don't get into where money does, indeed, change hands.
SIEGEL: Well, the subject that Elise Hu was reporting on is one that you address in a chapter called "Thick Versus Thin Markets." What do thick and thin mean, in this case?
OYER: Well, a thick market is one with a lot of participants. And so you want your stock markets to be thick because then it'll be easier to trade, there will be more supply and demand; and we'll have a more efficient market where transactions will be easier, and nobody will feel they're getting ripped off. Now in the online dating world - and the job market is exactly the same - we want a thick market because we want better matches. And I want to go to one that has a lot of alternatives because I want people who are closer to what I'm looking for.
SIEGEL: But what about a very thin market, I guess, which would be people-in-search-of-relationships-with-economics-professors.com?
OYER: Well, that the niche site I'd like to see him try to get going...
OYER: ...for my own personal reasons. But I wouldn't invest money in that. And so these niche sites can be very useful, if the niche is big enough. So the site you just laid out and other ones like, there is a gluten-free site and there's a tennis site that I tried, I think those niches are just too small. The niche sites that have done very well are the ones where the niche is big enough to create a thick market. So Christian Mingles has been very successful, for example.
SIEGEL: Now, in your chapter on thick and thin markets, you manage to go from online dating services to work on how hospitals hire gastroenterologists. I want you to explain the connection there.
OYER: Well, so the gastroenterologist market every year is exactly like the dating market. At the end of a fellowship, a gastroenterologist will go looking for a job. And there are hospitals out there that are looking for gastroenterologists. So it's a job market that is very much like a - online dating site, in some ways. Now, it's a very thin market. There are just a few hundred - I forget the exact number - gastroenterologists who become available every year.
In some years, when supply of gastroenterologists is particularly low, the market breaks down. It's just too thin. And somebody has to come in and fix the market from outside, rather than let supply and demand naturally do it by itself.
SIEGEL: Now, at the end of each chapter in your book, which I should note is one of the thinner economics books...
SIEGEL: ...one can read. It's a great attraction. You offer a few summary lessons. And after the chapter on thick and thin markets, you write that big markets allow for more customization. You acknowledge the great benefits of big markets. But in the epilogue of the book, you describe what I gather is your own, happy relationship with a woman you met in a thin market. Do I have that right?
OYER: Well, I met her on JDate. And I think my story is actually the exact illustration of why thick markets are so important. My girlfriend works a hundred yards away from me, and we actually had many friends in common. But we met on JDate. And the reason - even though we had friends in common, we hadn't met. But we both went to where the market for the type of person we were looking for was thick, which is an online dating site. And it turns out, that was a great way to meet, even though we were running across each other in this thin market but not noticing each other all the time.
SIEGEL: The market...
SIEGEL: The market became thick because it was limited to only people who were looking to have a relationship with somebody else on JDate.
OYER: That's exactly right. That's exactly right. So I run across people like my girlfriend all the time, but very few of them are looking for a relationship. And so what made the market thick was we both went to this online dating site where everybody was there for that one reason.
SIEGEL: The relationship is still fine?
OYER: It's going great despite the fact that she keeps hearing me talk about how I'm dating in this incredibly rational manner. (Laughter)
SIEGEL: Well, good luck with that one. And thanks for talking with us.
OYER: Thank you so much for having me.
SIEGEL: That's Professor Paul Oyer, whose book is called "Everything I Ever Needed To Know About Economics, I Learned From Online Dating."
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