Star-Cursed Lovers: Role of Popularity Information in Online Dating
49 Pages Posted: 22 Jul 2019
Date Written: July 18, 2019
We examine the effect of a user’s popularity on her demand in a mobile dating plat-form. Knowing that a potential match is popular can increase her/his appeal. However,popular people are less likely to reciprocate, and hence users may strategically shade their revealed preferences for them to avoid rejection. In our setting, users play a game where they rank-order members of the opposite sex and are then matched based on a Stable Matching Algorithm. Users can message and chat with their match after the game. A key piece of information shown to users is a popularity rating, ranging from one to three stars. We quantify the causal effect of a user’s star-rating on the rankings that s/he receives during the game and the likelihood of receiving messages after the game. To overcome the endogeneity between a user’s star-rating and her unobserved attractiveness, we employ non-linear fixed-effects models. We find that three-star users receive worse rankings during the game, but receive more messages after. We link the heterogeneity across outcomes and user-level observables to the perceived severity of rejection concerns, and establish strategic shading as the mechanism. Further, users’ rejection concerns are consistent with Step-1 bounded rationality.
Keywords: online dating, popularity information, strategic shading, bounded rationality, two-sided platforms, mobile marketing, matching markets
JEL Classification: D83, D84, L14, L86, M31, J12, C23
Suggested Citation: Suggested Citation