Because going out and meeting people is costly and difficult.
But when we’re picking a life partner, everybody’s different. So in an ideal world, we would have the ability to search every single person out there and pick the ideal match.
But the world is not ideal and going about searching through people is very costly.
So online dating has actually provided a boon to the market, or at least from my perspective I think of it that way.
And if I want to buy a new house and I go from open house to open house, I could be doing other things.
However, we invest in those search costs because it’s worth it, because we get something we really want.
And so when we think about a place where investing and getting what you really want is particularly valuable, it seems like the market for a life partner is hard to beat.
So if we just go into some market where everything is commodity, I don’t know, stocks, or bonds, or something like that, we don’t need to do much searching.
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.
He’s the author of the book, Everything I Ever Needed to Know About Economics I Learned from Online Dating. Can you just maybe describe what the concept is and how you’ve applied it to this idea of looking for a life partner?
PAUL OYER: Well, in everyday life, we’re always going around making decisions and some of those decisions are very costly.
So when I go to the grocery store, if I spend a lot of time scanning the shelves, I could be doing other things.