Would you ever use Match.com or eHarmony?

Some people think that only "desperate weirdos" use online dating. Others have seen their perfectly normal cousins find great success with it. The goal of this post is not to tell you the creepy horror stories and adorable love stories that I have heard, because you've already heard enough of those that cloud your ability to view online dating objectively. I'm going to take a different approach to illustrate the debatable effectiveness of online dating sites.

One store has a digital camera for $49 with a close-up portrait feature that will be perfect for taking close-up pictures with heads touching. Another store has a digital camera that is not as great for $299. If you are rational and you know about both cameras, you would obviously buy the $49 dollar one because it better meets your photography needs and is cheaper.

However, if you only go to the store that sells the $299 digital camera without knowing about the better camera at the other store, you miss out. You might get ripped off, or worse, not buy a digital camera at all when you really wanted one. You don't have all of the information you need to make the rational decision. Fancy economists would say that perfect information is not present.

Some people that may or may not be rational would go to every store searching for the best deal. While these people save money on the digital camera, they pay for it dearly in time and gas spent searching for it. The time, money, resources, etcetera wasted on driving around town when there might not even be a better deal out there are appropriately called search costs.

The most rational consumer would find the best camera in a few minutes by searching for digital cameras online. It's no secret that the internet is revolutionizing the way we shop. The internet tells you the features and prices of the available digital cameras so that you can make the right decision without even leaving your home. It virtually (virtually as in "almost wholly" and virtually as in "through the internet") eliminates these barriers to rational decision making: lack of perfect information and search costs.

The concepts of search costs and perfect information can be applied to other stuff too, like dating. You don't even get the opportunity to meet every possible dating partner, let alone get to know each person enough to know whether or not his/her personality is what you want and need. Lack of perfect information prevails, and search costs are virtually (virtually as in "almost wholly" not "through the internet") infinite.

Just like the rational consumer can cut search costs by using the internet to find a digital camera, the rational dater can cut search costs by using the internet to find a partner. Sites like Match.com and eHarmony quickly sift through thousands of users and show you which ones have the features you're looking for. In this case, instead of a close-up portrait feature that will be perfect for taking pictures with heads touching, the "features" are sense of humor, religious beliefs, activity level, life outlook, and whether or not they are a Harry Potter fan.

If using online dating sites is a rational approach to dating, why doesn't everyone do it? Well, we aren't rational. When it comes to online dating there is another barrier to rationality: the network effect. Our online dating success depends on whether or not other people do it, so you won't do it unless other people do. If only a few "desperate weirdos" sign up for online dating, then you are less likely to find a match, whereas you can buy a quality digital camera regardless of whether or not other people do.

Since enrolling in online dating is only a rational choice if enough people do it, then other people have to do it. In order to make it a rational choice, enough people have to do it, but they won't do it since it's not a rational choice unless enough people do it. This is a bit of a debacle. How will people be convinced to break the catch 22? Maybe this blog post will help, or maybe viral parodies depicting "desperate weirdos" like this one:

Why are Americans becoming more promiscuous?

It is a mathematical fact that, on average, your friends have more friends than you do. You can read the entire article by Scott L. Feld, but here is my summarized explanation of this phenomenon:

Applying the same concept to a larger population, you are more likely to be friends with someone if they have 58 friends (your chance of being one of those friends is 58 out of 7 billion) than if they only have a few (your chance of being one of their friends is then only 3 out of 7 billion). So, if you average the amount of friends that your friends have, it is likely larger than the actual average number of friends that people have.

This concept also applies to number of sexual partners. You are more likely to sleep with someone if they sleep with 58 people than you are to sleep with them if they only sleep with 3 people. If someone has slept with zero people, he or she doesn't get counted in anyone's calculation of "average number of partners that my partners have." So, when someone looks at the average number of partners that her partners have had, it is likely higher than the actual average. The people that have slept with more people are overrepresented and the people that have slept with fewer people are underrepresented.

According to Social Comparison Theory, people form their own behavior by comparing themselves to others. So, if they compare themselves to their sexual partners, it is likely that their partners have had more partners than the actual average, so they will form their behavior based a skewed number. In other words, they will think, My partners have a high number of partners, so it is acceptable for me to sleep with more people, when in fact, their partners have had more partners than the average. So everyone sleeps with more people, pulling the actual average up. This is one possible factor that contributes to the national average number of sexual partners being higher now than it was in 1900.

I don't have the authority to make a judgment on whether or not the rising average number of sexual partners is favorable, but we can learn from this phenomenon to enhance our individual lives.

• Don't be discouraged when it seems like you are lacking friends. Using your existing friends as a comparison group, it will appear that most people have more friends than you do, when this is actually not the case.
• Appreciate your friends that only have a few friends and your partners that only have a few partners. If you get to have sex with someone that only has a few partners, you're pretty lucky to be one of them. 58 people can say "I slept with someone that slept with 58 people," but only 3 people can say "I slept with someone that slept with 3 people."
• Consider this concept in other situations. It also applies to family size (you are more likely to meet someone that has six siblings than is an only child) and crowded public places (you're more likely to be part of a crowd than part of a few random people). Can you think of any others?

Which test would you choose?

Suppose that today you have a test about a book that you were supposed to read. The book has 100 chapters, but you only had time to read 75 of them. (You were too busy watching How I Met Your Mother, making lists, driving to Sonic, sleeping, or blogging to finish the rest of the chapters. We don't really have time to debate about whether or not these activities were the best use of your time.) You walk into the test very nervous (because you only know 75% of what you're supposed to know), and your teacher (drumroll) has two stacks of DIFFERENT tests. She says she is going to let each student choose which test they want to take. She tells you your options and you analyze them.

Option #1 is a test with 100 fill-in-the-blank questions, one question about each chapter. Since you read 75% of the chapters, are adequately intelligent, and the answers are obvious if you read the chapters they are about, this option will guarantee you a grade of 75 on the test. So your expected grade if you choose this option is:
EV(option #1) = .75 x 100 = 75

Option #2 is a test with only one question, about a random chapter. Since you read 75% of the chapters, are adequately intelligent, and the answers are obvious if you read the chapters they are about, with this option you have a 75% chance of getting a 100 on the test, but a 25% chance that you will get a 0. So your expected grade if you choose this option is:
EV(option #2) = .75 x 100 + .25 x 0 = 75

Either way, your expected grade is a 75, so you should be indifferent about which option you choose. 

Before continuing with the conclusion of this post, I would like to make a quick note about an objection to my model that an adequately intelligent reader may have. I was thinking that the model might be different for a multiple choice test because if you took the long test, then you would have a 25% chance of answering correctly each of the 25 questions that you didn't know, thus raising your expected grade for the long test to 81.25. But, the expected value for the short test would also increase because if the single question was about a chapter you didn't read, you would have a 25% chance of getting it right. In the case of a multiple-choice test, the expected values of both options would be 81.25 (still equal).

However, there are other factors to consider.

First, what is your level of risk-aversion? A very risk-averse individual would prefer a guaranteed 75. But a risk-lover would hope for 100 even if it means she might get a 0. I will refer to this as the risk-aversion effect.

Next, how much do you value the time you will waste taking the test? If each question takes one minute to complete, the short test will only take one minute while the long test will take 100 minutes to complete. I will refer to this as the time-wasting effect.

A stereotypical extreme b.a. (badas*, not necessarily bachelor of arts) is a risk-lover and  thinks tests are a huge waste of time (she would rather be riding her motorcycle), so would choose the short test.

A stereotypical extreme dork is risk-averse and enjoys taking tests (she learns for fun so would probably use spare time to read anyway), and would thus choose the long test.

For a more moderate student that is neither of the two extremes, both the risk-aversion effect and the time-wasting effect will be present, so one must look at her individual personality to see which effect overpowers the other.

I myself am a risk-averse individual (I wouldn't gamble high-stakes and uncertainty stresses me out), so the risk-aversion effect is present. However, I am also an economist, and the opportunity cost of those 99 extra minutes wasted taking the long test could have been put to much better use (such as riding a motorcycle or reading the last 25 chapters), so the time-wasting effect is also present.

So the real question isn't "Which test would you choose?" but rather "What is your individual personality?"

What makes us so productive some days and so unproductive other days?

I got a lot of work done today. I even wrote in my blog! We all have some days in which we are quite productive and other days that we don't accomplish anything.

So the dependent variable, y, is a measure of productivity.

One possible independent variable that would explain 100% (R squared=1) of the variation in y would be my level of motivation. This proves that a high R squared doesn't necessarily mean the model is a useful one, because this model isn't very useful. Of course I'm more motivated when I get more work done. But why? What I'd really like to find out is: what causes me to be more motivated? By explaining the variation in my motivation level, I can use this knowledge to turn lazy days into productive ones.

So I came up with a list of other possible independent variables to test:
SLEEP= # of hours of sleep the night before
JOG= # of miles I jogged in the morning
ZUMBA=a dummy variable equal to 1 if I had Zumba and 0 otherwise
LIST= a dummy variable equal to 1 if I made a to-do list and 0 otherwise
FACEBOOK= # of minutes spent on facebook
WINE= a dummy variable equal to 1 if I drank the night before and 0 otherwise

There are many problems with these possible variables.
SLEEP: While it may be true that to an extent more sleep leads to higher productivity, this doesn't really apply with too much sleep (for example, 13 hours makes me feel like I woke up out of a black hole and I don't want to accomplish anything). This could be a problem we observe when trying to apply data taken on developing world countries to the United States. For example, eating cheeseburgers in some African countries makes them "healthier" because any calories are better than no calories. But eating cheeseburgers where we have an abundance of food makes us less healthy.

JOG: This variable will likely show a high correlation with my productivity level, but it is questionable whether my productivity is what causes me to jog, or that jogging causes my productivity. This is a reason we should question statistics such as "eating breakfast makes you healthier." But maybe people eat breakfast because they are health conscious, rather than being health conscious because you eat breakfast. When put this way, the statistic doesn't make as much sense.

FACEBOOK: The number of minutes spent on Facebook is just a representation of how many minutes I didn't spend in the library instead. What actually leads to productivity is doing work in the library, rather than not going on facebook. This is similar to the commonly accepted statistic that replacing milk with soda increases bone density. Is it the increase in milk or the decrease in soda that actually contributes to higher bone density?

LIST: Maybe before I make the list, I am destined to be productive because I have a lot to do, and making the to do list merely indicates that I have to be productive, rather than actually causes productivity. For this reason, we should question statistics such as "reading to your baby in the womb will make them smarter." Maybe you read to your baby because you are smart, so they are destined to be smart whether you read to them or not. Reading to your baby is an indicator of smart parents, and smart parents are the actual cause of smart babies, not reading to them in the womb.

ZUMBA: I could arguably try to fudge this statistic so that it appears that Zumba increases my productivity. For example, I could only teach Zumba on weekdays, and then on weekends when I am less productive I didn't have Zumba. I would leave out the variable WINE so that it appears that when I have Zumba I am more productive, when the real reason is that I didn't go out the night before. That way, people will think Zumba causes productivity and want to come to my class. I could have an ulterior motive behind this study. This can be seen when cereal companies tell you that eating breakfast helps you loose weight or dairy companies tell you that milk decreases your chance of osteoporosis.

Can you think of possible issues with WINE? What about possible issues with other statistics you have heard? What leads to higher productivity is a question that still needs to be answered. But I do hope that I have encouraged you to question statistics that you would normally accept without question. What may appear to be true may not be true at all.