March 22, 2009
Match Making through the Internet
Match Making through the Internet-Becker
The Internet has produced revolutions in many kinds of behavior, such as greatly reducing the advantages from reading newspapers, but one of the most important is in providing easy access to various kinds of social interactions. The remarkable growth of social networking sites, such as Facebook and Twitter, reflect the desire of many individuals to communicate with other persons they do not know. The explicit goal of various networking sites, like E Harmony and Monster.com, is to solve age-old matching problems. A challenge over many centuries is how to help eligible young men and women find suitable marital mates? Traditional societies use marriage brokers and relatives to bring young persons and their parents together, while in modern societies young persons meet through co-educational colleges, jobs, and dating. Both traditional and modern societies have struggled with the difficulty of finding suitable matches- Mrs. Bennett's lamented in Pride and Prejudice (published at end of 18th century) the difficulties of finding suitable husbands for her five daughters. Similar matching problems occur in modern labor markets, where workers search for good jobs, and employers search for good workers. Search theory in economics shows how both workers and firms generally stop short of finding the best possible matches because of the cost in time, money, and passing up opportunities of continuing the search process. As a result, workers of given skills may end up with jobs that pay differently, and that differ also in other characteristics, while firms that pay similar wages may employ workers of different productivities. The Internet provides significant opportunities to improve the search process, whether for men and women looking for suitable mates, or for workers and firms looking for good employment matches. It provides an especially good method of searching for individuals who are new to a city or other area, for persons who do not meet many potential matches through their work, schools, friends, or relatives, for those who want to cut down on the time spent searching, and for others who do not want their friends or others to know that they are actively searching. According to its publicity, eHarmony, an important online marital matching site, "matches you based on compatibility in the most important areas of life - like values, character, intellect, sense of humor, and 25 other dimensions." Online matchmaking has grown rapidly during the past decade. Some estimates claim American online dating and matchmaking companies take in over $1 billion per year. Estimates for China and India, probably exaggerated, are at $1.3 billion and $300 million, respectively. Revenues from online dating sites continue to grow rapidly, especially in Asia, although the worldwide recession has slowed down these growth rates. These data exclude men and women who meet online not through official matching sites, but through more informal social networking, as in chat rooms and Facebook. It is difficult to know precisely how many men and women marry because they met their mates through online matchmaking sites. I know several friends who did, but perhaps I know busy or hard to please men. Match.com says it has more than 15 million members. A study by Harris Interactive conducted for eHarmony finds that over 86,000 eHarmony users married between April 2006 and March 2007, which is three times the number estimated for 2005 in a different study. The Harris study also estimated that over two percent of all persons marrying between April 2006 and March 2007 were introduced through eHarmony. Economic theory and empirical evidence (see my A Treatise on the Family) indicate that men and women who marry tend to have similar backgrounds by religion, race, education, family income, and many other characteristics. This is called positive assortative mating. Since marriages between persons of similar characteristics usually (but not always!) produce more satisfactory relationships, it is not surprising that marriages between unlikes; that is, persons with quite different characteristics, such as by education, religion, or race, are far more likely to end in divorce than are marriages between similar persons. I would expect matches made online,just like those made by traditional matchmakers, to generally bring together persons with rather similar characteristics since the preferences of individuals, and also the matching algorithm used by different online sites, would tend to match individuals with similar backgrounds. Given the analysis and evidence cited in the previous paragraph, this would imply that marriages brought about online would tend to be more stable than other marriages. I have not seen any studies that try to test these theoretical implications on the degree of assortative mating and the marital stability of online matches. The online job search market is much larger than that for dating and marital matching. Help wanted ads used to be an important source of income for local and even larger newspapers, but most of that market has dried up because job search shifted online. This has been one of the important factors in the sharp decline of newspaper revenues, and the despair gripping that industry. Online employee-employer matching companies claim many advantages for their method of matching workers to jobs. Foe example, the company OpenHire asserts in its advertising that it will "Centralize your recruiting into one system that reduces data entry, eliminates processing service fees and controls agency fees. OpenHire integrates with e-mail, online job boards, corporate job sites and internal intranets..."
By lowering search costs, online matchmaking for the marriage and labor markets, and for other markets as well, improve the efficiency of these markets by reducing the variance in the quality of the matches to persons with given characteristics, whatever the characteristics are. In the future these markets will have more of an international flavor, where individuals will search online for good job or marital matches in countries other than where they are living. Online matchmaking, whether formal or informal, will increasingly have major implications for the sorting of individuals in marriages, jobs, and in other types of matches, implicatiosn that would have been extremely difficult to foresee in the early days of the Internet.
Internet Matching--Posner's Comment
Matching is a form of search in which the object is to create a relationship, such as marriage or employment (marriage could be regarded as a form of employment). Matching is more complex and often more protracted than most searching for goods or services because the stakes tend to be greater. The costs of exit may be high and often there are high opportunity costs as well. The higher these costs of mistaken matching, the more it pays to invest in the search for a good match. But a protracted search is very costly; for example, if one spends 10 years searching for the perfect mate, one has lost 10 years of benefits of marriage.
If one divides the process of searching for a match into two parts, which I'll call "screening" and "meeting," one can see more easily the precise benefits of Internet matching services. The universes of potential mates, workers, and jobs are immense, and while very few members of these universes are suitable candidates for a particular match, it is very difficult to determine in advance who those few might be. So the first task in the search for a match is to screen out the vast number of unsuitable candidates, and this is done much more quickly, completely, and accurately (and therefore costs less and confers greater benefits) by an Internet search than by such traditional alternatives as mixer dances, marriage brokers, the personal columns in magazines, wanted ads, and job fairs. Once the candidates for a match have been reduced to a manageable number, the more time-intensive, face-to-face meeting phase of the matching process takes over; an efficient preliminary screening greatly reduces the aggregate costs of the expensive "meeting" phase of matching. In job search, the meeting phase is the interviewing of the most promising candidates.
However, two forms of non-Internet marriage-matching screening should be mentioned, as they are also relatively new (and increasingly common) and highly efficient. They are coeducational higher education and gender integration of the workplace. In effect, both the college, which wants a homogeneous student body, and the employer, who wants a homogeneous work force within each job category, do the prescreening at no cost to the searcher, and the fact of taking classes with, engaging in extracurricular activities with, or working side by side with someone of the other sex reduces the incremental costs of the "meeting" phase of the search: you don't have to go out of your way to meet someone you work with or go to class with.
My guess would be, therefore, that the demand for Internet marriage screening would be less among students and among young workers in workplaces that have a fairly even balance of men and women, and greater among persons who are not in such advantageous situations and among persons who have high opportunity costs of time, like successful businessmen and professionals. It should also be greater among persons who have idiosyncratic or minority tastes. For example, since homosexuals are a relatively small fraction of the population, I would expect their demand for Internet match-screening services to be proportionately greater than that of heterosexuals. Personal ads in magazines that have a specialized readership are another form of non-Internet preliminary screening.
The advantages of Internet job matching over newspaper want ads are particularly great, and this for four reasons. First, in any community in which there is more than one newspaper, the job searcher (whether looking to be hired or to hire) has to buy and read both newspapers (or however many there are), even though he may derive no value whatsoever from anything in the second through nth papers except the want ads. Second, a job search is often regional or national rather than local, and it is infeasible to do a regional or national job search by means of local newspapers. Third, the costs of paper greatly limit the number of jobs that can be advertised in a newspaper and the amount of information that can be conveyed about each job or job hunter. And fourth (though related to the first point), a newspaper is a bundled commodity, and people searching for jobs or workers may derive very little value from the other sticks in the bundle.