catallaxy files

catallaxy in technical exile

The economics of Internet dating

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Apparently the match.com dating website is being accused of setting up fake dates to encourage customers to resubscribe. Frankly I was guessing that something along such lines would have been going on anyway – call me a cynic. The incentives for website operators would be quite overwhelming – they needn’t even necessarily have to employ people to actually go on dates. Just an expression of romantic interest in the form of one of those ‘kisses’ that require membership to follow up on, say, the day before the customer’s subscription is due to expire, would be sufficient. If it came from a really ‘hot’ profile, how many red-blooded single men would not go ‘oh, what the hell, let’s renew it for another month and see how this works out?’ Then after exchanging a few emails, the employee could just feign a sudden change of events – she met someone else, or a family member fell under a bus, and suddenly all plans for meeting fall through.

Of couse one would expect the victims of such fraud to be men. Dating websites are an example of two sided markets where men are basically the ‘beggars’ and women the ‘choosers’ (for a variety of possibly sociological and evolutionary reasons) – such markets lose value in the eyes of its participants if the numbers on one ‘side’ are disproportionate to numbers on the other. It’s interesting though why so far dating websites don’t practice price discrimination the way pubs and nightclubs (which essentially also provide a kind of dating service or at least a ‘meat market’ ) do to get the proportions right (e.g. ladies’ nights) – I suppose that might have more to do with verification problems over the Internet. And obviously there is enough profit to trick male customers into resubscribing if only because they are easier to trick into staying at low cost, and then of course there’s the strategy of padding the website with fake profiles, which Yahoo Personals has been accused of.

Another interesting aspect of dating websites is their different exchange models. Both Yahoo and match.com get customers to pay for the ability to send emails to other members for a certain period (say 1 month or 3 months). By contrast RSVP gets its members to buy a certain number of stamps (books of 6, 12 24 and so on). In addition, this package has an expiry date – for instance something like 3 months for a book of 6. Thus it would seem that the RSVP exchange model is a lot less value for money for customers. But not necessarily. I suspect the RSVP model would be encouraging of the more valuable female membership than the others. With the pay for a certain time period model, members (I suspect predominantly male ones) would have the incentive to send out emails helter skelter to any female that might be of interest. Female members would then have to sort through dozens of emails from every Tom, Dick and Harry daily. With the RSVP model, members are likely to be more discerning in their use of stamps, reserving it for people who they think might respond to them (otherwise it’s a wasted stamp) i.e. people whose profiles actually seem a genuine match. This is mitigated to some extent by the RSVP ‘kiss’ system which allows members to send out free kisses to other members to test the waters – if the recipient sends back a free positive response to the kiss, then this is a signal that a stamp would not be wasted on the recipient. Interestingly members can also opt to turn off the ability to receive kisses – and presumably those who want to filter in only the really keen or relatively wealthy would want to do so.

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Written by Admin

November 21, 2005 at 6:31 pm

Posted in Uncategorized

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