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How can we make it so that when somebody says I’m interested in you, they really mean it.

And the way they did that is they use the what an economist would call the idea of signaling.

So loneliness in the partner market is basically similar to unemployment in the job market.

PAUL OYER: There’s a big problem in the online dating world which is it’s very easy to say something, I’m interested in you or I have this certain characteristic, it’s showing it that’s more difficult.

And so one thing that I found particularly interesting is when an online dating site in Korea stepped in and said, OK, how can we make this market work a little better?

But when you do shop for a house, you just need to find the one you really want and be willing to pay enough for it.

Whereas, when you pick a life partner it’s much more akin to the job search. And as a result, what ends up happening is both employers and people looking for jobs as well as people looking for significant others are always wondering could I do a little bit better? So I might date somebody a few times and I think, well, you know I can probably find a match that would be a little bit more appropriate.

Download this podcast SARAH GREEN: Welcome to the HBR Idea Cast. I’m talking today with Paul Oyer, Professor of Economics at Stanford’s Graduate School of Business. SARAH GREEN: So Paul, I’d like to just kick off by talking a little bit about the economic concept of search costs.

Last modified 11-Nov-2016 02:06