Recently, I’ve been thinking about the frustration people feel with dating in the 21st century. I’m certainly frustrated, and I think I’ve come up with a decent economic model that helps explain it. I think I can explain a lot of what’s going on, from women’s higher standards, to the rise of looks-based dating (including the anthropological discussion about men turning to plastic surgery), to the increasing number of single men. I hope that at least one of the comparative statics will be interesting, though for some of you this may seem obvious. Note that all of this is about monogamous dating.
The model I propose is a two-sided matching model, merged with elements of a job search model and a model of private information. People have preferences over two things: an observed characteristic (such as looks or photos) and an unobserved characteristic (such as personality). Suppose that their preference strength is increasing and proportional to their own value (a weighted average of observed and unobserved value); similar valued people are willing to date similar valued people.
In a typical job search model, the optimal strategy is to hold out until you get an offer above your “reservation wage.” The concept of reservation values is particularly useful here, since it explains many dynamics in the dating market. In this case, it represents the minimum physical attractiveness (quality of the observed characteristic) of a person you’d be willing to date. But unlike the standard job search model, which has only one searcher and one fully observed characteristic (the wage), dating introduces additional complexities.
Here, the unobserved characteristic (personality) can only be discovered at a cost. You can form rough estimates of personality through different strategies: stalking someone on Instagram or LinkedIn (low cost), texting them (medium cost), or going on a date (high cost). Because it takes effort to learn someone’s “true” value, both the distribution of personality traits and the relative weight people place on personality become central.
Reservation value represents the minimum physical attractiveness of a person you’d be willing to date. You can sub in "beauty standards" every time "reservation value" is mentioned.
Now let’s consider what happens to reservation values of physical attractiveness in this setup.
Physical beauty standards (reservation values) fall when the variance of unobserved traits rises. Think of personality or income. If there’s even a small chance that someone has an exceptional trait, people lower their looks threshold. Suppose income matters. You know a billionaire is on the app, but you don’t know who. In that case, it makes sense to swipe right on unattractive people and go on dates. You might discover the billionaire among them.
People who don’t “date around” and seek permanent relationships have higher physical beauty standards (reservation values). Those viewing dating apps as a path to marriage will hold higher standards overall. This is because the more permanent things are, the less likely you’ll be willing to settle. On the other hand, if you treat things as if you’re just “trying them on” for size, then you’ll have lower reservation values.
Higher “flow rates” of offers raise reservation values. In other words, if you get a large number of messages on a dating app, your standards for physical attractiveness increase.
People who emphasize personality (often long-term daters) should, in fact, have lower reservation values (standards) for looks. This is obvious and matches observed patterns: women seeking long-term partners emphasize personality more heavily and care less about physical attraction. Meanwhile, people looking for short-term flings, who weight personality less, raise their reservation values for looks, since attractiveness is the main trait that matters for them.
Instagram or a referral from a friend functions as a cheap way of vetting lemons. It reduces information asymmetry much like a car inspection in Akerlof’s lemons market.
Because of private information about personality, the optimal dating strategy resembles venture capital. You filter candidates based on a reservation level of physical attractiveness, accept all those above that threshold, and build a “portfolio.” From there, you vet individuals one by one through stalking, texting, or dating--discarding those with bad personalities.
With this framework in place, it’s interesting to explore the comparative statics and incentives to participate. Let’s assume private valuations are accurate, that people who believe they have a good personality actually do, and that people understand their own level of physical attractiveness. Everyone is rational and optimizing. Even under these assumptions, the model produces some surprising failures.
People with mismatched traits opt out. Consider a two-by-two matrix: physical attractiveness (high/low) and personality (high/low). Those with high attractiveness pass reservation values regardless of personality. Those with low attractiveness and low personality also find matches among each other. But people with high personality and low attractiveness are stuck. Nobody they are willing to accept will accept them. As a result, they opt out. This implies that, conditional on participation, dating apps will show a correlation between attractiveness and personality, even if the true population distribution is independent! Ugly people on dating apps will have bad personalities because if they had good personalities, they wouldn't be using the dating app.
Instead of opting out, some compensate. People with good personalities but poor looks may turn to signaling: high-quality Instagram photos, lifestyle curation, or other ways of boosting perceived value.
The easiest market segment is actually the lowest-value group. People with low attractiveness and bad personalities don’t compete with the low-attractiveness, good-personality group, since the latter often opt out. The people that find the market “medium” hard are attractive people. Attractive people find the market comparable to offline dating. The worst experience falls on people with high personality but low attractiveness.
Reservation values on physical attraction enforce strong assortative matching. Ugly people end up with ugly people, and attractive people pair with attractive people. Apps intensify this sorting because they make reservation values more efficient. This occurs even if people value personality as much as looks.
A “no-trade zone” emerges. High-value but unattractive individuals don’t receive matches. The size of this no-trade zone grows when people place more weight on observed traits and when they raise their reservation values. Counterintuitively, this means that larger markets, which increase the rate of offers, actually worsen the problem by raising reservation values (physical beauty standards) and expanding the no-trade zone. This is interesting because traditionally, larger and more deep markets meant greater efficiency. But in this case, it actually makes people more picky, and therefore makes certain individuals worse off.
The solution if someone is in the no-trade zone? Find a smaller market where people are more interested in long-term dating, and where your personality can shine.
These dynamics occur regardless of platform. It doesn’t matter whether you’re on Tinder, Hinge, or Bumble, the underlying mechanics are the same. And that is why if you’re married and managed to snag a good partner, consider yourself lucky that you don’t have to participate in this market.