{"id":18062,"date":"2016-11-18T14:27:28","date_gmt":"2016-11-18T19:27:28","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/on-dating-apps-demographics-the-heart-wants-what-i-t-wants\/"},"modified":"2016-11-18T14:28:30","modified_gmt":"2016-11-18T19:28:30","slug":"on-dating-apps-demographics-the-heart-wants-what-i-t-wants","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/on-dating-apps-demographics-the-heart-wants-what-i-t-wants\/","title":{"rendered":"On Dating Apps & Demographics: The Heart Wants What I.T. Wants?"},"content":{"rendered":"

So how did you two meet? <\/strong><\/p>\n

Once upon a time, behavioral economics and technology both swiped right. They hooked up. And now we have dating apps. These mobile matching markets have revolutionized the way singles meet. Tinder alone leads to approximately 26 million matches between users per day [1].<\/p>\n

For background, Alvin Roth and Lloyd Shapley won the 2012 Nobel Prize in Economics for their work in matching markets, which revealed that \u201csystems designed to elicit people\u2019s true preferences generated better matches, between hospitals and doctors, for example.\u201d Applied to dating, these intermediary platforms leverage Facebook profile information and algorithm-based economic analysis, allowing for significant predictive power around the most anxiety-inducing obstacle in real-world dating: determining mutual interest.<\/p>\n

Per Roth and Shapley, the best matching markets are \u201cthick,\u201d benefitting from numerous participants, thereby increasing the chances that you\u2019ll meet someone who also enjoys Carly Rae Jepsen and Long Island Iced Teas. Combined with geo-tracking technology on our smartphones, the likelihood of a connection based on proximity also goes up [1].<\/p>\n

By obviating this nerve-wracking step of putting yourself out there, leveraging technology around smartphones and social media, and capitalizing on network effects, dating apps have gained tremendous traction since their advent in 2012.<\/p>\n

But will we compatible longer-term? And why do apps matter?<\/strong><\/p>\n

Well, you could meet the one! Or maybe not. But anyway. From a sociological standpoint, dating apps will impact demographics in a big way. In the long-term, they could significantly boost trends toward \u201cassortative mating\u201d (i.e. biased selection of partners based on similar income and skills). Studies posit that this trend accounts for 18% of income inequality growth between 1960 and 2005 in the US [1]. Already though, 5% of Americans who are married or in a committed relationship met online [2], and with more than 500 dating apps currently available on iTunes, this proportion is projected to grow steadily in coming years.<\/p>\n

Playing the field? Meet Hinge. <\/strong><\/p>\n

\u201cWith a young, increasingly busy and mobile audience [\u2026] the market is big. Dating apps are expected to log $628.8 million [in 2015], up from $572 million in 2014 [4].\u201d<\/p>\n

\"hinge-logo\"<\/a><\/p>\n

Dating app Hinge took note of this opportunity. Their business model mirrored that of their better-known competitor, Tinder: sign up, share info, determine preferences, swipe right, swipe left, match, catfish, swipe left, swipe right, match, date [6]. However, Hinge\u2019s business model was predicated on connections exclusively through shared Facebook friends, an important differentiator that helps mitigate the creepiness factor of online introductions.<\/p>\n

\u201cIt’s complicated.\u201d Challenges for Hinge, and the industry more broadly. And some solutions.<\/strong><\/p>\n

The Dating Apocalypse<\/strong>. Users started to swipe left on the whole industry, as \u201c81% of Hinge users never found a long-term relationship on any swiping app\u201d; \u201conly 1 in 500 swipes on Hinge turn into phone numbers exchanged\u201d; and \u201c4 of 5 Hinge users can\u2019t recall the first name of their last right swipe [5].\u201d<\/p>\n

Over-saturation of the market<\/strong>. Unfortunately, as hypothesized by Roth and Shapley, \u201ccongestion\u201d of markets leads users to become overwhelmed by choices, and consequently, to remove themselves from the platform altogether.<\/p>\n

App makers responded with specialization. For instance, Bumble, an app where the woman must initiate conversation, targets feminist users, while JDate focuses Jewish singles \u2013 mazel [1]!<\/p>\n

Hinge responded with its newest operating pivot, which required members to respond to \u201cendearing\u201d questions to create a \u201cstory\u201d instead of a profile. Information sharing increased, and their matching market became even thicker. Per company estimates, members are now 4x as likely to initiate conversations, and connections are 9x more likely to result in a date.<\/p>\n

\"hinge-2\"<\/a><\/p>\n

\"hinge-1\"<\/a><\/p>\n

Operating & strategy. \u201cMoney can\u2019t buy me love\u201d \u2013 right?<\/strong> Most dating app operating models are based on some form dynamic pricing. Hinge posits that a subscription model should help \u201cweed out creeps and flakes [5].\u201d Contentious as it may be, dating apps favor those who can afford to be upsold to a paid subscription. Regardless, keeping a free user base might prove additive to the thickness of the matching market.<\/p>\n

What else?<\/strong><\/p>\n

A self-defeating proposition.<\/strong> Investors will remain wary, simply because a successful relationship means two fewer users on your two-sided platform. Marketing teams would be wise to advertise success stories \u2013 we all have a friend who met their better half on an app \u2013 to help with broader brand awareness, and mitigate any lingering taboo associated with virtual connections.<\/p>\n

Happily ever after?<\/strong><\/p>\n

Have romance and meeting IRL grown apart? Probably not. All at once though, dating apps are becoming increasingly specialized by type of user, less taboo by public perception, more sophisticated in their algorithms, and more effective in their sharing of information. As a result, they are optimizing networking effects, and perfecting matching markets.\u00a0For singles out there, sounds like\u00a0a solid wing.<\/p>\n

(798 words)<\/p>\n

Sources:<\/p>\n

[1] http:\/\/www.economist.com\/news\/finance-and-economics\/21692926-find-true-love-it-helps-understand-economic-principles-underpinning<\/a><\/p>\n

[2] http:\/\/www.pewresearch.org\/fact-tank\/2016\/02\/29\/5-facts-about-online-dating\/<\/a><\/p>\n

[3] http:\/\/one.npr.org\/?sharedMediaId=413986198:414689895<\/a><\/p>\n

[4] http:\/\/www.wsj.com\/articles\/the-dating-business-love-on-the-rocks-1433980637<\/a><\/p>\n

[5] https:\/\/www.washingtonpost.com\/news\/soloish\/wp\/2016\/10\/03\/why-is-the-dating-app-hinge-bashing-swipe-apps\/<\/a><\/p>\n

[6] http:\/\/www.nytimes.com\/2014\/03\/30\/fashion\/hinge-a-dating-app-introduces-friends-of-friends.html?_r=0<\/a><\/p>\n

Photo credits:<\/p>\n

Company<\/p>\n

http:\/\/singleinatl.com\/wp-content\/uploads\/2014\/02\/Hinge.jpg<\/a><\/p>\n

http:\/\/movieboozer.com\/wp-content\/uploads\/2014\/06\/relationship-memes.jpg<\/a><\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

How economics and technology can help you find your Tinderella.<\/p>\n","protected":false},"author":2063,"featured_media":18101,"comment_status":"open","ping_status":"closed","template":"","categories":[2548,2547,1697],"class_list":["post-18062","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-behavioral-economics","category-matching-markets","category-technological-innovation"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"\nOn Dating Apps & Demographics: The Heart Wants What I.T. 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