Flanders, S. (March 2019). Catfish: Lying in Matching Markets with Cheap Talk.
Sam Flanders | ASB Faculty | Research Paper
We study a search model of online dating with nontransferable utility where agents are vertically differentiated, self-report quality, and must go on costly dates to verify a match’s quality. We show that these per-date costs induce some agents to over-report their type, consistent with the stylized facts of online dating platforms where users frequently over-report characteristics like height and income, a phenomenon known as catfishing. This make agents less picky by preventing high types from rejecting some low types, and since externalities in matching markets without transfers can make agents inefficiently picky, these costs can improve total market surplus. A monopolist platform owner may also have an incentive to increase per-date costs in order to increase profits. Thus, inducing lying amongst users can actually be optimal for a platform.