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In the market for love? Here’s how economics can help

These days we turn to online dating to give us more options for a love affair or a life partner. But how do you maximize your chances of hitting the jackpot? Economics correspondent Paul Solman explores how the language of economics can apply to the language of love.

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  • HARI SREENIVASAN:

    Leading up to Valentine's Day, Paul Solman takes an encore look at the economics of dating, how some people are using market principles to overcome the traditional impediments to finding the perfect match.

    It's an updated presentation of our Making Sense series, which airs every Thursday.

  • PAUL SOLMAN:

    Facebook software engineer Mike O'Beirne, 23, AKA cirrussly online, had been looking for a date since moving to New York four months ago.

  • MIKE O’BEIRNE, Online Dater:

    It was really at my brother's urgings. He told me I need to start going out and dating people.

  • PAUL SOLMAN:

    Ad agency art director Priyanka Pulijal, also new to New York, her love handle, brbeatingcupcake. The BRB is Webspeak for be right back.

  • PRIYANKA PULIJAL, Online Dater:

    I think you have to meet a lot of different people to first understand what you want. And I think, once you understand what you want, you have a lot of different options.

  • PAUL SOLMAN:

    So what did they want? Each other?

  • PRIYANKA PULIJAL:

    Hi. Nice to meet you.

  • PAUL SOLMAN:

    Last February, they agreed to let us record their very first date.

  • MIKE O’BEIRNE:

    Do you guys mind leaving now?

  • PAUL SOLMAN:

    OK, we would BRB.

    But while we give our daters some alone time, we checked in with their online matchmaker, OkCupid. Founded a decade ago by four Harvard math majors, the site was owned by IAC, the same media conglomerate that ran Match.com, which charges a monthly fee, and the mobile app Tinder.

  • CHRISTIAN RUDDER, Co-Founder, OkCupid:

    Between OkCupid, Tinder or Match, we will sign up easily over 30 million people this year alone.

  • PAUL SOLMAN:

    That was OkCupid co-founder and president Christian Rudder nine months before AIC spun off the dating Web sites, selling stock in them to the public via an IPO.

    There was already plenty of competition, though; eHarmony was big. And niche sites were trending, for Jews, Christians, farmers, sea captains, mimes, the gluten-free, the incarcerated, the unhappily married, and of course, accompanied by Mozart.

  • WOMAN:

    Welcome to Purrsonals.com. As a fellow cat owner, I know how finicky we are.

  • PAUL SOLMAN:

    But no matter how finicky, you're better off with more than less.

  • CHRISTIAN RUDDER:

    Imagine a mixer with three people. That would be a pretty rough, pretty rough hour if you lasted even that long there. But OkCupid, metaphorically speaking, is a mixer with four million people.

  • PAUL SOLMAN:

    In the language of economics, the study of maximizing human welfare, this is what's known as a thick market.

  • PAUL OYER, Author:

    Where would you rather buy a pair of pants, at the Mall of America or on the streets of a small town in Oklahoma?

  • PAUL SOLMAN:

    Economist Paul Oyer has actually written a book, Everything I Ever Needed to Know about Economics I Learned from Online Dating, based on his own adventures looking for love.

  • PAUL OYER:

    So, I found myself back in the dating market in the fall of 2010, and, immediately, as an economist, I saw that this was a market like so many others.

  • PAUL SOLMAN:

    Well, not any old market, like the one for pants. This is a market for what economists call differentiated goods.

  • PAUL OYER:

    No two potential life partners are the same. Every single one of them is different. From an economics perspective, searching for a partner is just cost-benefit analysis.

    (LAUGHTER)

  • PAUL OYER:

    This isn't funny.

    (LAUGHTER)

  • PAUL OYER:

    This is economics.

  • PAUL SOLMAN:

    And that analysis includes, in the lingo of economics, search costs.

  • PAUL OYER:

    It takes time and effort to find your mate. You have to set up your dating profile. You have to go on a lot of dates that don't go anywhere. These frictions, the time spent looking for a mate, lead to loneliness or, as I like to say, romantic unemployment.

  • PAUL SOLMAN:

    Oyer found himself romantically unemployed when he first took the online dating plunge, as it happens, on OkCupid, and had written separated on his profile. But at least he didn't say he was actually unemployed or drug-happy or a glutton, even bigger turnoffs.

    Those are among the tidbits gleaned from the millions of responses in OkCupid's database, shared by Christian Rudder in his book Dataclysm, not that all are exactly shockers.

  • CHRISTIAN RUDDER:

    When people come to a dating site, all they look at is the pictures, for the most part.

  • PAUL SOLMAN:

    Rudder has since left OkCupid, but beneath the sidewalks of New York, Erika Christensen is still hawking what is arguably a more discriminating approach.

  • ERIKA CHRISTENSEN, Trainspottings.com:

    You are very handsome. Are you single, by any chance? If you find yourself single, I'm a matchmaker.

  • PAUL SOLMAN:

    Yes, a real live matchmaker whose turf happens to be the subway.

  • ERIKA CHRISTENSEN:

    You are very handsome.

  • PAUL SOLMAN:

    The days leading up to Valentine's Day are the busiest of the year for this Hello Dolly of the L Train, at the moment, looking for lasting love on behalf of two 30-something female professionals.

  • ERIKA CHRISTENSEN:

    What we're dealing with is the biological clock, and these women want the 35-to-45-year old man quick. They want him yesterday.

  • PAUL SOLMAN:

    So you mean that you're sizing up these guys as…

  • ERIKA CHRISTENSEN:

    Potential baby daddies, that's right.

  • PAUL SOLMAN:

    Since time is money, clients are willing to pay a couple of grand or more, sometimes much more. OkCupid, by contrast, is free. But, to Christensen, you get what you pay for.

  • ERIKA CHRISTENSEN:

    I think online dating is great, but it's basically humans as commodities.

  • PAUL SOLMAN:

    There's another objection to online dating as well.

  • R.D. ROSEN, Author:

    OkCupid, by making a huge universe of people available to you at any minute, doesn't that work against a rational decision about whether to invest in the relationship you have?

  • PAUL SOLMAN:

    Writer R.D. Rosen, who's used online dating, is working on a book about how courtship is evolving.

  • R.D. ROSEN:

    There's an enormously addictive quality to online dating that has never existed before in the culture. You want to keep going back, because you think you're going to hit the jackpot eventually.

  • PAUL SOLMAN:

    Rudder doesn't deny it.

  • CHRISTIAN RUDDER:

    Whether you're gay or straight, we're constantly showing you people. There might be someone better looking or who has a cooler profile or whatever it is just right around the corner always.

  • PAUL SOLMAN:

    And not just gay or straight.

  • JIMENA ALMENDARES, Chief Product Officer, OkCupid:

    At OkCupid, we have 22 genders and 13 orientations.

  • PAUL SOLMAN:

    That's right, 22 genders and 13 orientations, including our favorite, sapiosexual, attracted to intelligence. And to further complicate, chief product officer Jimena Almendares has just added another option.

  • JIMENA ALMENDARES:

    Earlier this year, we launched a feature that if people are searching for someone else in their relationship, they can actually publicly state that and people that are interested can respond.

  • PAUL SOLMAN:

    To Paul Oyer, though, a surfeit of choice is just another search cost, for which economists have a fairly simple solution:

  • PAUL OYER:

    What you need to do is you need to settle, to say, I have somebody who's good enough. People hate it when we say that. But it's the way — it's the way a rational economist would think about it.

  • PAUL SOLMAN:

    But wait a minute. After my first date with my now wife, I knew she was the perfect mate. And last year was our 30th anniversary.

  • PAUL OYER:

    The perfect one for you doesn't exist. But there's a very important idea in labor economics called firm-specific human capital. And that is, as you work at a company for a longer time, you have certain skills that are valuable at that company and not elsewhere.

    Well, you have built up something we will call marriage-specific human capital. You have developed your life around your wife, such that she probably is the best match for you at this point.

  • PAUL SOLMAN:

    Meanwhile, our daters had to get back to their jobs.

    So, how had it gone?

  • MIKE O’BEIRNE:

    So, we both found out that we had like way more in common than we expected.

  • PRIYANKA PULIJAL:

    I felt we really connected about a lot of different things.

  • MIKE O’BEIRNE:

    I will probably e-mail her later.

  • PAUL SOLMAN:

    Actually, he didn't. That same week, he met a new flame.

    Meanwhile, Priyanka began dating an old friend. A year later, they're still going strong.

    As for me, Paul Solman, economics correspondent for the "PBS NewsHour," I'm still ever-so-happily married, and wishing all of you, online and off, another welfare-maximizing Valentine's Day.

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