Romantic Unemployment: Neoclassical Economic Theory in Online Dating and Labor Markets

By Felix Carreon III. University of Michigan. 

Both the online dating and labor markets are matching markets in which firms and agents must agree they’re a good fit for one another. As a result, the model of the labor market can be used to illuminate factors in the online dating markets that are well explained by traditional neoclassical economic theory. Some of these characteristics include search theory, preference signaling, and thick markets. A large portion of this paper focuses on preference signaling, the ability of agents to signal to employers strong interest in a position. This model can also be used in the realm of online dating. Professors Soohyung Lee and Muriel Niederle from the University of Maryland and Stanford University, respectively, designed an experiment to determine the effect of virtual roses on accepting proposals from online daters. However, there are factors in both of these markets that run contradictory to neoclassical economic theory. Examples include the paradox of choice made famous by psychologist Barry Schwartz and the presence of asymmetric information, which through cooperative game theory can lead to efficient outcomes in the online dating market.

Read the full paper here.