19 Feb 2016

Tinder: Love and... Economics?

The Author's "research" bio :)
Geerte writes*

My first ever Tinder-date was a guy who on his profile claimed to be ‘obsessed’ with specialty beers. I, seventeen at the time, thought of this as a reassuring sign of undoubtable masculinity, and agreed to meet him at a small pub in Amsterdam. Two hours into the date I had solely counselled the boy through his family problems, while quietly sipping away four recommended types of beers – each price approximating my €5,66-an-hour salary at the Albert Heijn bakery. We split the bill. I deleted his profile from my phone that same evening.

Still, I wasn’t sorry. Laughing at myself with some friends I had informed about the Big Event beforehand, I concluded that despite the fiasco I had managed to enter a ‘mature’ new crowd – the Internet-Daters. What does Tinder do to our minds? Why do we endlessly rethink buying a €19 concert ticket that we know will give us pleasure but agree to go on dates that often result in the opposite? In other words, why do we decide that the tiny possible prospect of love is worth our money?

Thirty years before the birth of Tinder, Daniel Kahneman and Amos Tversky concluded that people do not weigh gains and losses linearly. As their theory of loss-aversion [pdf] shows, losing will often feel much worse than winning will feel good. When observing Tinder-daters, this notion of loss-aversion might lead to the radical idea that romance isn’t dead – people value the possibility of "winning" love so highly, they are willing to lose some money if they don’t succeed.

Luckily however, there are more rational souls out there. Like the guy who texted a girl to send him back his £3.50 after an unsuccessful date, because he did not like ‘wasting money.’ More direct tips to keep your cash can be acquired from a gentleman claiming to have ‘lost his wallet’ when seeing the bill, or, if you’d rather make a profit, a woman stealing her date’s car.

Keeping the above in mind, perhaps Kahneman, Tversky, Tinder and I together have just provided you with a great opportunity to test how much you value love yourself. How many €5 specialty beers does it take to regret your na├»ve, hope-fueled excitement? Without receiving a cent from its marketing team, I’d suggest you simply download the app and try. For apart from some money-hunters, Tinder has managed to create a fairly enjoyable market for people offering and searching for love. It is freely available, making time, energy and perhaps some self-esteem your only loss if you spend an afternoon swiping left and right.

Bottom Line As Kahneman and Tversky have argued, most people hate losing more than they love winning. Since the odds of a Tinder-date turning out very successfully are often small, internet daters seem to be more willing to risk ‘wasting’ money in order to find love than you’d perhaps expect.
* Please comment on these posts from my microeconomics students, to help them with unclear analysis, other perspectives, data sources, etc.

DZ's Addendum: The Economist says dating apps "thicken markets" (a good thing), and the BBC on people meeting in different ways (online may take over from "via friends").


Lauren Wessel said...

Great post Geerte! Really enjoyed reading it. To add to that, I think that in the market of Tinder in general more risk-aversion is involved compared to the regular market of dating. The transaction costs are very low, you simply grab your phone and start swiping. If there is a match, you already know that this person is at least a little interested in you (assuming that that person is not that desperate that he swipes every single person appearing on his/her screen...) and that you can probably start talking to them without making a complete fool out of yourself. However, if you are at a bar, and have to walk up to someone you do not know at all, the chance of getting rejected is much higher, as you are not sure if they are mutually interested. Here, risk of loss of face (aka losing) is much higher, showing how Tinder in general is risk-averse. Great post, keep up the good work!

Onno said...

Very interesting post and story Geerte!
I think you were very successful in showing that people seem to make a "high-risk" bet when they date: the risk of spending lots of money, and getting nothing in return. For guys, this economic risk might be even higher, as they might feel forced to pay for the entire bill due to informal institutions. For women, the risk might also lie in the relative lack of safety of going on a date with a complete stranger. So why do people still go on dates? The explanation might be found in two things.
First of all, as you already mentioned, the rewards might also be very high. Thus, dating is a "high-risk" "high-rewards" game, and this might explain why people are willing to take the risk. Especially the idea of finding true love, will justify almost any spending.
Secondly, even though going on a date that fails might seem terrible, the alternative is probably perceived as worse. If one decides not to date because of the risk of failure, one might end up living alone with 20 cats. In comparison to the perceived risk of this, going on a date might actually be a small risk, and thus preferable.

All with all, these were just 2 extensions to a very interesting post!

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