According to Oyer, you can see everything from why executives "sugarcoat" their company's situations to why qualified candidates remain jobless, reflected in the world of online dating. Hey, it worked for him: Ultimately Oyer met his match online. Turns out online dating (or, say, the marketplace of life partners) operates a lot like other markets, says Paul Oyer, an economics professor at the Stanford Graduate School of Business and author of . Below, Oyer shares some of the insight he gained through his own forays into the online dating world.
On a dating site, lots of members mean lots of available potential matches.Assuming the algorithm of each site you visit is good at matching members, if you're given 10 matches from a site with 100 members and 10 from a site with 10,000, bigger is better.You'll see more options over time, and the matches will likely better suit you.This is what is called a "thick market" — one with a lot of options — and a thick market is usually more efficient.A large portion of lying on dating sites is a rational response to try to improve the number of responses a profile gets.
Even if you're determined to be 100 percent honest when setting up an online profile, you should expect that your competition is fudging the truth.
It comes back to a theory called "cheap talk," which is a branch of game theory.
This framework considers the potential conflict between a party's own preferences and the person he or she is trying to attract, to analyze when (or if) it's sensible to hide information or lie. To be rational, the truth can only be mildly off-base.
In the book, I use the example of buying a pair of jeans: If you have an hour to shop, would you rather be in Manhattan or in a rural community?
The city, of course, because there are more options and more chances you'll find what you need.
Keeping the idea of thick markets in mind, aren't small, niche sites inefficient?