Preamble: incredibly, this blog pre-dates tinder (pun intended). I say this because my earliest Valentine’s Day posts usually involved some kind of justification for online dating. But now, online dating is ubiquitous. So I’m going to re-work some of those principles slightly differently. And in case you’re wondering about that terrible ‘love economics’ in the title – it’s because it’s V Day, and being contrived is part of the love game.

Searching for a partner often sounds like looking for the right pair of shoes. Only, it’s a very specific shoe that you’re hunting for. It needs to be the right size, comfortable, fitting with your personal sense of style, and it should match most of your wardrobe. Also, because good shoes are expensive, you might hope that the pair of shoes will be both versatile and durable.

The problem is: each pair of shoes is unique and does not come in duplicates. You can get similar ones, but they’re never quite the same.

Which means that it’s quite a tall order.

It’s an especially tall order when you realise that there is no mass market. Instead, what we’re talking about is an individual decision about many many small markets, each consisting of exactly one pair of shoes (which you either do or do not want).

The Market for Soulmates masquerading as Perfect Shoes

Here is what you face:

  1. A world of shoes
  2. Only a few of which, if at all, will be what you’re looking for.

If I was to try and draw this in economic graph form, you’d have a whole lot of these:

love economics: the market for partners
All supply and no demand

Being shoes that you do not desire.

And a few of these:

Love economics: demand graphs
The saddest graph of all: unrequited demand

Where you know what you want, but you can’t find it (or you can’t have it).

Hoping for this:

Love economics: where demand meets supply
When demand meets supply, there’s nothing you won’t do or pay

Which is basically the real world equivalent of “for richer, for poorer”…

The real trouble is that the world is filled with shoes that you won’t wear. Not even if you were paid to wear them.

What That Points To
Given that there are many markets, only a few of which will be star-crossed, we can say the following:
  1. This is a volume game; and
  2. Best you get started with the shopping already.
The Good News: It’s Less Onerous Than It Sounds

Fortunately, when it comes to volume games, there is no need to try every single shoe in existence.

The playing field can rapidly be narrowed down by:

  1. Gender (50% out – unless you’re non-binary)
  2. Age (eliminates at least a further 25%)
  3. Culture
  4. Spiritual/Life outlook
  5. Other value and lifestyle factors…

In fact, within a few thoughtful moments, you can isolate out a thin margin of society for the compatibility test.

And I think this is why couples meet each other so quickly. We have naturally tended, since birth, to spend time with people that we like. We do not face a world where there is a bell curve of people, equally distributed across time and geography. Instead, we tend to clump into groups formed on the basis of similar outlooks, experiences, classes, cultures and interests.

So the traditional path of being blind-dated by your friends? Yes – it makes sense that it is often successful. You’re shopping in the right places.

It’s also why we tinder

As we get older, the groups of friends begin to dwindle. The successfully-coupled tend to spend more time with the successfully-coupled. We start working, and there is less time to club and bar-hop and form new groups of friends. And more than that, our priorities, interests and schedules tend to crystallise. As that happens, the larger groups of friends from our university years begin to splinter into a few core relationships with the occasional reunion and random chance encounters.

So we solve for the reduction of social circles by going to a market-space where the available goods are clearly-marked:

  1. When shopping for shoes, it’s always nice to be directed to the right store by someone whose taste you already trust.
  2. But when that option is not really available, you have two alternatives:
    1. Wander into all the local bars stores looking for a pair of shoes that appeals; or
    2. Browse Okay Cupid Amazon.com with very clearly-defined search terms.
  3. Option A takes up a lot of time.
  4. Option B is just easier.

Online dating is not embarrassing or desperate. It’s just economically efficient.

Making it work

When I discuss this at dinner parties, I hear a lot of people talking about their lack of success on the dating front. Reading between the lines, my gut feeling is that this is often a crisis of demand. If you decide that you will only date women that are trilingual chemical-engineers (or lawyers – you’re not unreasonable) that look like a younger version of Claudia Schiffer (or Emily Blunt – again, you’re not unreasonable) – then you are searching for a market that may not exist.

Or, you find people looking for the perfect pair of shoes. Shoes that are both exciting and comfortable. That both look new, and feel like you’ve been wearing them forever (without getting bored).

This is the kind of expectation that might just be divorced from reality. Historically speaking, most of human history has prescribed this romantic pattern for life-partners:

  1. Arranged marriage; followed by
  2. Raising children; followed by
  3. Growing old, having come to love to each other over a lifetime of companionship and shared experience.

Now, we have a different ‘romantic’ pattern:

  1. Fall in love;
  2. Get married;
  3. Deal with the passion fading;
  4. And if you manage to deal with the passion fading, then perhaps you can reach the old-school step of growing old together.

The ‘falling in love’ makes it seems as though there is nothing but fate and happenstance involved. But actually, we’re not passive participants in the process. With investment and time, we get to build the relationships we want. We get to wear in the shoes, and figure out how to make our wardrobes and our habits conform (rather than the other way round). And we’ll do that because that way, life can be more comfortable – as opposed to trekking around barefoot.

And if that’s your worldview, then the search for a partner isn’t looking for perfect. It’s more looking for someone to work with.

Rolling Alpha posts opinions on finance, economics, and sometimes things that are only loosely related. Follow me on Twitter @RollingAlpha, and like the Rolling Alpha page on Facebook at www.facebook.com/rollingalpha.