The Internet has revolutionized not only how we search for information but also how we communicate and interact with others. Central to the ever-expanding digital infrastructure for human connection are online matching platforms. Also known as two-sided markets, these platforms connect users with mutual interests in a range of markets, from ride-sharing (e.g. Uber) to dating (e.g. Match.com). According to Dongwon Lee and Hyungsoo Lim of HKUST and their co-researchers, the secret to finding the perfect match lies in the design of online matching platforms. They focus on a crucial yet underexplored design feature—choice capacity, or the number of potential partners a platform user can view and select.
“As making a choice (i.e., selecting a candidate to further investigate their fitness for a match) is the first step in the matching process,” explain the researchers, “designing choice capacity is an important decision for online matching platforms.” However, little is known about how choice capacity affects online matching in the real world. To fill this gap, the researchers empirically examined the trade-off between providing high and low choice capacity in the context of online dating. Their findings provide much-needed “practical guidance on how to design choice capacity to increase engagement and matching outcomes.”
The researchers conducted a randomized field experiment in collaboration with one of the largest online dating platforms in South Korea. They divided 6,327 of the platform’s users into four groups to examine the impact of different choice capacities on the numbers of choices and matches made. Fascinatingly, their analysis revealed different behaviors for female and male users. “Although increasing the choice capacity of male users yields the highest engagement,” the authors report, “increasing the choice capacity of female users is the most effective method to increase matching outcomes.”
They explain these results in terms of four key mechanisms. Increasing the choice capacity for users on one side of the platform increases the engagement of that side (known as the positive same-side effect) but decreases the engagement of the other side (the negative cross-side effect). This happens because “male and female users behave differently as their choice capacity increases,” say the authors. When presented with high choice capacity, women become less selective (the competition effect), while men become more selective (the choice effect), which lead to more matching outcomes for women.
The findings of this novel empirical study have important practical implications. “Firms should be aware of the fundamental trade-offs of increasing choice capacity when designing their markets,” say the researchers. “A one-size-fits-all choice capacity design that simultaneously results in the highest engagement and most matching outcomes might not exist.” Therefore, firms should strategically design choice capacity to optimize users’ engagement and matching outcomes.
“Our guidelines can be applied beyond the context of online dating to other online matching platforms,” say the authors. “Understanding the effects of choice capacity on engagement and matching outcomes is a crucial step in developing optimal design strategies for matching markets.”