What Game Theory Can Teach You About Online Dating? There Is Plenty of Room for Innovation and Money To Be Made.

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A few days on the beach is too much for me. But perfect place to write my blog posts. Watching these love birds on the beach, I started to think about game theory and love. What advice an economist can provide for online dating service by applying game theories?

 

Finding a spouse is a game, a serious and sometimes high risks (high reward I hope) game. We are looking at different types of network behavior (the high demand princess, the career type, the girl next door and the appearance-over-substance-and-insecure type etc. We all kind of know how the game works, and some people are better at it.

A quick primer on game theory: Game theory is a branch of applied mathematics that is used in the social sciences, most notably in economics, as well as in evolutionary biology, engineering and military strategy. It attempts to mathematically capture behavior in strategic situations, or games, in which an individual’s success in making choices depends on the choices of others, pretty much like chess game.

While initially developed to analyze competitions in which one individual does better at others expense (zero sum games), it has been expanded to treat a wide class of interactions. Imagine an online dating service that only the super attractive can join? Or the super successful? Or dating only for virgins? Or lawyers dating lawyers? How niche we want to get? Using these examples, anyone looking for an opposite (or same sex) can exit once they find the right person.

Imagine a dating site for the super gorgeous and handsome. Every member’s preferences is based on looks, and therefore their payoffs are equal to how good looking their partners are. Although good looking is subjective, it is also quite objective compare to other factors. There are easy ways to use a software algorithm to identify what features are considered good looking plus information on weight and height.

In this game, everyone is looking for the best looking person and share the edge with the ideal partner who can maximize the rewards from such a relationship. Since everyone is attempting to maximize their rewards.

It would start with the most attractive woman or man finding the second most attractive partner and exiting the community with maximized rewards from both parties’ ends. Then the third most attractive person, seeing that the prospects of at picking the most attractive person or the second most attractive person, will settle with the fourth most attractive person in order to maximize rewards, and the thing continues on and on.

When people exit the system, the next most attractive pair will become the optimal choices in the community for each other. This model does present many problems, if you are not among the best looking; you simply have to wait for your turn. Other factor includes timing, if an attractive person enters the community at a particular time, it will change the order. You may be pushed back to the wait list. I will need a few hours to build a spreadsheet modeling out the different outcomes. I also need to add the factor of “desperateness” too. What if we are not talking about just appearances?

Let’s introduce another element- virginity. OK this real, a husband and wife team decided to create an online dating site only for virgins, called YouAndMeArePure.com. It primarily caters for virgins to meet other virgins (not sure what’s the average age of their members). Imagine everyone there is a virgin, and then I wonder how age plays a key factor.

Unlike other dating site, you can always go back to the game if the matching doesn’t work out. In this case, you only have one chance. Because if you lose your virginity, you can no longer join this dating site. So technically, there is only one chance for both parties. This changes the game dynamics totally.

If we apply game theory to this business, the first and most attractive virgin will be gone quickly, but age may play a key role here. I am not sure a 45-year-old virgin, no matter how attractive, will get to the top of the list. So how does that change the game dynamics? This complicates the business rules. I need to spend the next few days on the beach to crack this one.

I don’t know exactly how the rules work since I am not a member. You obviously have to be a virgin to join, or you’ll have your membership evoked once you’ve lost your virginity. Not sure how they validates that. Yes you can buy gift certificates and V-Cards that ID your V-ness (or degree of V-ness) on the site. I am not sure if you regain your virginity through surgery counts (if you’re female). Or they are forgiving to those who lost their virginity by all kinds of accidents.

I am already spending too much time here; I should be applying my game theories to something more useful. Such as when Blackberry enters the table market how Apple should response. Enough talking about virgins.

Original Post: http://mootee.typepad.com/innovation_playground/2010/08/what-game-theory-can-teach-you-about-online-dating-there-are-plenty-of-room-for-innovation-and-money.html