By Sadaf Hussain
I love free markets for the simple reason that it provides every product with a generous dollop of innovation and efficiency. The competition it breeds fosters goods and services that cater not just to tangible wants like buying a house or going to a doctor but even intangible human needs, like finding love. I live in an era where there is an app for everything, theres Amazon, Practo and of course, our generations trendiest app- Tinder.
Some time back when I was still (un)blissfully ignorant of the extent of technological creativity, a kind and noble friend of mine suggested I join Tinder. I was single (still am), was bored with the bland taste of life and prone to cribbing every time I saw a couple in a mall or restaurant or any public setting for that matter (theyre everywhere, arent they?). So, having nothing to lose, I decided to experiment by adding this interesting ingredient of online dating to my life. As I joined the app, I could feel the tinge of my world undergoing a radical change while I proceeded forwards to assume my righteous title of Heartthrob (my mother did tell me I was a handsome boy). Unfortunately though, reality begged to differ. Contrary to the slow-motion movie playing in my alternate reality, I got zero matches in real life.
For those who are still daydreaming in the age of Dinosaurs, Tinder is a dating app, which allows you to scout for the potential love of your life. The old school task of courting is reduced to viewing the profile of the opposite sex (or same/ both) which consist of a few photos exported from Facebook along with a couple of lines of text. See it as window-shopping for love where, a left swipe is equivalent to a rejection, and right, to acceptance. Two people swiping each others profile in the right direction results in a match, blessed by the omnipresent God of Tinder (equivalent to your average Cupid, except way more targeted and 21st century). And thats it, product sold. Only once they match, are they provided with a chance to chat and arrange a date, if they so wish.
As an average-looking user of this app who did not receive a match, I used this opportunity to nerd out on Tinder. This pet project brought me to the conclusion that Tinder, not only helps two consenting individuals engage, but also displays signs of a well-functioning market devoid of any regulation.
One could view Tinder as a free market where parties engage with one another, by exchanging and investing resources in what the other has to offer, without any regulatory authority. Ones tastes and preferences are fed into an algorithm, and based on the provided information; choices are presented to the user, who can then view other profiles based on the same degree of information as is divulged by them. A mutual agreement by the two parties (i.e. swiping right) then results in a chance for the individuals to do business, so to speak. Tinder is, thus, a pretty good example of free markets and to some extent, probably even perfect competition.
People join Tinder for two reasons, either they are shy and introverted but are comfortable seeing people online and breaking the ice (much like myself), or it is an extended version of the dating market for others. For all who are familiar with the concept of dating (and in todays age, most of us are), know it to be quite a cutthroat venture. There is a high opportunity cost being attached to any one relationship courtesy the increasing magnitude of choices flooding the platform and information asymmetry, coupled with an even greater risk of investment (be it in terms of financial resources, personal and emotional involvement or time forgone). With high risk though, comes even greater potential for yield. Amidst todays social constructs, hitting the jackpot of loyalty is equivalent to discovering a chest full of treasures.
Working in this framework, Tinder employs basic and intuitive economics to ensure efficient allocation of resources for its users, to the best of its abilities.
To amateurishly and broadly quote one of the key tenets of the Austrian school of Economics, valuation of any good is subjective i.e. beauty is in the eye of the beholder and any attempt at predicting this valuation is mathematical jibberish. So, in Tinder terminology, the best strategy to land a match and get a date, is by uploading the best picture of yourself (be it with a fancy car, or in the gym, a selfie or group picture) and as many as possible. Differing with each individual, this will ensure that no one user impinges on the opportunity of another. The cost of the effort taken to groom yourself and describe your key tastes and preferences, is also going to be lower than the benefit received by a match, especially when the match will only take place when someone is as interested in the degree and quality of information you have shared as you are in his/hers. Eliminating the possibility of any initial information asymmetry, the odds of finding a match are at most neutral. Not to mention that the subjective valuation of beauty is bound to naturally ensure that someone is interested in your profile at some point and place. This greatly decreases the opportunity cost associated with dating now days, as the option to chat and get in touch will only show once the preliminary stage of introductions and commonalities have been passed. So, one will not have to waste time or mental effort in exchanging and mapping basic interests, and then dropping the conversation if it doesnt work out.
Following the workings of an assurance contract, the app allows for a user to chat with another only once both parties give a virtual contributive consent by way of swiping right. Post this, much like an options derivative; the user has a right but not the obligation to chat. This window to chat can be further used to deduce any gaps between what has been advertised and a real time observation made via textual conversation with the user at the other end??analogous to a consumer testing the goods in any market place. Such an opportunity allows for a shot at purging any failure the market might have fallen prey to displaying.
This free market of love also tends to follow the infamous rule of economics i.e. law of marginal diminishing returns. In the initial days Tindering (yes, this is a legit verb now), I had a careful eye and was highly selective of the right swipes. But with the passage of time, I transitioned into the veteran phase, which so often includes frustrated undertones as a background score. This new Tinder phase saw my finger swiping right at a faster rate, accepting almost every picture, which passed by. So the thrill that accompanied the initial swiping of those whom I perceived to be highly suitable (not to mention the potential utility of those gains) fazed off as my finger took a perpetual right swipe swing at every picture, even though I knew that the utility received from such a transaction would not be maximum.
Tinder, displaying characteristics of a barter economy, tries to eliminate information asymmetry plaguing the dating market, decreases opportunity cost and risk, improves the yield of the investment while upholding a consenting and leveled framework between the stakeholders- all of this without any regulation or distortion
Tinder is a good example of the market at work. Studying behaviour on Tinder is a clearly microcosm of comparative advantage, prices, demand and supply, and trade. So how about reading more about human behavior and action (read Mises!) and then trying your hand at this app.
The author works on conceptualization, implementation and partnership of outreach programs and public policy courses, at Centre for Civil Society.
This article was originally published on the Spontaneous Order.
Featured image: Vimeo