Online dating sites have increasingly become a vital platform for individuals seeking romantic partnerships, transforming how people meet and connect. Despite their widespread popularity, it is less widely known that the success of such interactions often hinges on the size of the dating pool accessible on these platforms.
Recent research has shed light on how the number of potential matches, or the “market size,” and the number of competitors vying for attention, or “competition size,” can significantly influence user behaviour in online dating scenarios. A comprehensive study by Jessica Fong of the University of Michigan, titled “Effects of Market Size and Competition in Two-Sided Markets: Evidence from Online Dating,” provides critical insights into these dynamics. The study, published in the INFORMS journal Marketing Science, aims to decipher how these factors individually and collectively impact the decisions made by online daters.
Fong’s research delves into the psychology behind user selectivity and activity on dating platforms, exploring the hypothesis that a larger pool of potential partners would enable users to be more selective. Conversely, increasing the number of competitors should theoretically make users less picky, as they face more competition for attention and responses.
To conduct her study, Fong partnered with an online dating platform, which provided her with a unique dataset: real-time information about the number of active male and female users and their geographical proximity. This setup allowed her to simulate various dating market conditions and directly observe how changes in market and competition sizes influenced user behaviour.
Her findings revealed some surprising patterns. Contrary to the typical assumption that more choices lead to greater engagement, Fong discovered that increasing the number of available potential partners decreased the likelihood of users participating in the platform. Specifically, a 50% increase in potential partners was associated with a 1% drop in user participation rates. This suggests a paradox where too many options can feel overwhelming or diminish the perceived value of each interaction, leading to lower engagement levels.
Additionally, the study examined the gender dynamics at play, particularly in the context of heterosexual dating scenarios where men are seeking women. Here, the “competition size” involved the number of men present on the site, while the “market size” pertained to the number of potential female partners. Fong’s analysis pointed out that men adjusted their selectivity based on their awareness of the number of other men and the number of women available. This indicates that decision-making in dating scenarios can be highly strategic and responsive to perceived chances of success.
These findings have profound implications for understanding consumer behaviour in two-sided markets beyond dating, such as job recruitment platforms or housing markets, where multiple parties must make choices that affect each other. Fong’s research adds depth to our understanding of economic and social behaviours in digital environments, emphasizing the complex interplay of individual preferences, market conditions, and competitive pressures.
This study contributes to the academic discourse on economic behaviour in two-sided markets. It offers practical insights for online dating platforms aiming to optimize user experience and engagement strategies. By understanding how market size and competition affect user behaviour, these platforms can better tailor their features and algorithms to foster engagement and successful user outcomes.
More information: Jessica Fong et al, Effects of Market Size and Competition in Two-Sided Markets: Evidence from Online Dating, Marketing Science. DOI: 10.1287/mksc.2023.0142
Journal information: Marketing Science Provided by Institute for Operations Research and the Management Sciences