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Chicago’s Hinge Launch and an Economic Analysis of Hot-or-Not Online Dating Applications

By Erin Lenhardt '15  |  april, 2014, Issue 1
Erin Lenhardt

Erin Lenhardt '15

A new dating app, Hinge, recently launched in Chicago. Its kickoff party took place at Paris Club and was well attended by Booth students. Hinge positions itself as being like Tinder, which has a reputation for facilitating sexual encounters through its hot-or-not and much talked about swipe-right-to-like interface, but Hinge is "for people who actually want relationships." Hinge leverages your Facebook network in order to match you with friends of friends. Matches are delivered in daily batches that are proportional in size to the number of friends you have on the app.

Hinge's success, like other online dating services, is dependent upon direct network effects: any given user's utility increases as more users sign up for and use the application. By hitching its wagon to a well established social networking site with centrality like Facebook and encouraging users to recruit friends in order to increase their own utility (i.e., the number of matches they get daily), Hinge attempts to mitigate the network effects that kill so many new dating sites. Hinge's CEO and creator explains, "We're trying to create the first social dating app—one where you want to tell your friends about it.

By introducing the user only to the friends-of-friends matches they have indicated (or signaled) that that they like, apps like Tinder and Hinge are meant to reduce dating search costs. The idea is to enable you to spend less time worrying about weirdos so that you can hurry up and discover whether you've found someone worth dating—or even marrying. This sounds promising for those who are serious about finding love; however, from talking with women who have signed up for and used Hinge, their plentiful matches are leading to no conversations at all. Why's that?

Men and women are using apps like Hinge differently. Women tend to review their matches carefully, giving consideration to the factors they think are indicative of good partners. They're selective. Men, of course, have realized that women are selective (at least more selective than they are) and have learned that the best way to maximize their utility on dating sites is to always swipe right, and to ultimately let the women do the initial choosing. Men signal that they're interested in everyone, let women narrow their option pools, and then choose among their actual options. It's a strategy that's economically efficient and greatly reduces men's search costs.

Since men have learned to always signal interest—even when they don't mean it—sites like Tinder and Hinge really aren't working for women who want more than a casual hookup. By matching you with only the people who are actually interested, building a profile for you, and leveraging your existing network of friends of friends, Hinge was designed to reduce search costs and prevent false signaling. Men simply aren't using the apps in this way, and so the whole system breaks. Unless dating apps like Tinder or Hinge can figure out how to make signaling more expensive, they'll continue working well for men—and women—who are looking for casual relationships and will continue to fail those who are in the market for actual partners.
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Erin Lenhardt is an entrepreneur and founder of Norm's Farms Elderberry products. Follow her on Twitter @erinlenhardt.

Last Updated 4/9/14
Last Updated 4/9/14