V. (Paddy) Padmanabhan
Professor of Marketing
There is no turning back from online dating: Matchmaking and online dating has become a $2.5 billion dollar industry, and about 25% of U.S. couples now meet on the internet. While most early dating websites operated as simple platforms where users could freely browse and contact members, newer sites have made matchmaking technology an important value proposition. But are the lovelorn better served for it?In a recent study, researchers examined the fundamental conflict of interest that exists between matchmakers and their clients: Upon finding a compatible partner, users typically terminate their site subscription, hurting the firm’s revenue and cash flow. It is therefore unclear whether profit-maximizing sites would strive for the most effective matchmaking technology, or deprioritize innovation.The researchers’ analysis finds the factors that hinder matchmakers’ motivation to offer better technology, as well as the factors that incentivize innovation.