The Dating Market: The Economics of a Relationship

Jennifer Lipman analyses behavioral economics within the dating market

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A Tinderella Story by Lauren Maires

Finding love is a hot commodity—something heavily in demand, but not so easily obtained. What I would like to argue is that the “Dating Market” explains the basic concepts of economics in very basic terms because it is a market in itself. Although this is not to say individuals themselves are commodities, we can instead look at the values of scarcity, opportunity cost, risk, rewards, and trends in personal relationships. By looking at dating through the eyes of an economist, we can discern questions like “why do people date the most in uni?” or “why are dating apps so popular?” At its core, microeconomics is the study of choice, value, and individual preference. What better describes that than dating?

In a basic sense, the search for romantic relationships is much like any other market. At its core there is the question of supply and demand. As the supply rates fluctuate, so does the balance of negotiating power. On a university campus, as we approach “cuffing season” where people look to settle into relationships, there will be a great demand for potential partners, but those who meet your criteria and  sexual orientation might restrict the supply. For a real-world example, we might look to China’s population imbalance.

After years of a selective one-child policy which favored males and sometimes resorted to female infanticide, there is a great disparity between male bachelors in search of wives. From an economic standpoint, the population scarcity of eligible women in “supply” within the marriage market gives females greater negotiating power. The same also applies to university campuses with gender imbalances among the student population. Scarcity drives up the value, and therefore the negotiating power of the “owner”.

The dating market is also similar to the idea of competition and differentiation within a monopolistically competitive market. To explain, when Five Guys sells burgers alongside Burger King and McDonald’s, these businesses draw you in by distinguishing their product through different types of advertisement. Yes, they all sell hamburgers, but Five Guys uses peanut oil and fresher ingredients.

While in the dating market, competing against other potential “suitors”, we try to differentiate ourselves by highlighting our best attributes. We’re funny, kind, smart—we can cook you that hamburger because we’ve learned how to use an oven! Date us because of our unique qualities which the competition doesn’t offer! Yes, the opportunity cost of going on a date with Person A might mean you can’t simultaneously go out with Person B (unless they’re into that), the rewards outweigh the potential loss.

If you want a date but it’s hard to find one, when you eventually get one it might increase your value of it. This relates to situational comparative value relating to scarcity. Diamonds are valuable because of their scarcity, but if you’re trapped in the desert heat, a 30p bottle of water is more valuable than a diamond necklace. If you are the person who goes out on the town every night, you might attribute more value to your night-in binging Netflix as a break than someone who only goes out on special occasions. It might also offer a lens for that feeling of “butterflies in the stomach” when you first enter a new relationship because it’s something of clear value that before had been scarce.

Even when entering the dating market, you need to know who is actually looking to date? It’s the question which sparks so many Crushes pleas: “tag all your single friends below!” So, who counts as being part of the dating market? I’d like to compare this to the job market and who is defined as “unemployed”. A person who is defined as “unemployed” in the job market only constitutes those who are out of any work but are actively looking. So, those who aren’t searching for a job do not count. Moving onto the dating scene, if you are not in a relationship currently of any kind and you are not looking, you are not in the “dating market”. If you are dating, you count as “employed”. If you are single-but-looking, you count as “unemployed”. If your Facebook status says, “It’s Complicated”, you count as “employed”, but it’s a side-gig, rather than full-time. You might seek a future promotion, or it might only be temporary, but either way, you are still active within the dating market.

It’s at this time during university that the market for the potential dating pool is at its largest. University is a unique time in your life because of the increased amount of “single” people within your age range, sorted by similar interests. These people are not just from your hometown, either. The university setting draws together a new pool of potential partners from all across the country (and abroad) which one previously might not have had access to meeting before.

It’s this very concept of increased supply of potential partners entering the “market” that I will argue aids the popularity of dating apps. Similar to the introduction of the automobile’s impact on courtship, apps like Tinder or Bumble expand the general dating pool beyond your immediate friend group or the residents of your city. Courtship before the access to easy transport meant you might only meet a select few potential partners, introduced through a network of family and friends. The intended aim of dating apps, as with the role of cars in courtship, is to expand the dating pool. Instead of the handful of people you might meet in person within a limited vicinity, dating apps offer access to “singles in your area”, and therefore increases the supply of potential partners. Although there’s some criticism about apps like Tinder increasing promiscuity, cars in the 1920’s were dubbed “sin wagons” for the same reason, so at least it’s nothing new…

So, you’ve entered a relationship! Congratulations. They’re smart, witty, they think Tangled is better than Frozen—you think you’ve found the one! However, now that you’ve gotten serious, you’re spending money to maintain this relationship. This will be known as the cost of operation. The operation cost of a relationship is the money you spend to make sure everything runs smoothly while dating. It’s Halloween and you want to do a couple’s costume: there’s an expense. You want to go out to dinner as a couple, boom. If it’s their birthday, Christmas, or Valentine’s day, you better have a small gift. In our society, these couple’s activities come with a monetary “expense”. The cost of operation is the money you spend so you can continue engaging in these activities.

Finally, with the cycle of dating, there’s always that unfortunate possibility of breaking up. This is where the dating market really is unique. Unlike really any other market where carrots at Morrisons can be substituted for Tesco’s brand, relationships don’t have a “perfect substitute”. This is not to claim a lost relationship itself is “perfect”, but that each one is unique. Each partner brings unique qualities and experiences to the relationship and it cannot be replicated exactly. It demonstrates the complexity of human nature.

The study of economics strives to understand human choice. Within the dating market, it might be the decision to put yourself out there and look for a partner, or the decision to settle down. Is the risk of rejection by asking out your crush worth the possible reward? What’s the opportunity cost of staying single instead of “going steady”? Relationships have relative scarcity and can be a status symbol. Yet, it’s the personal value which seems to be the primary incentive for dating. Because we value companionship, relationships are desirable enough to warrant risk.

 

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