A Hedge Fund’s Take on the Dating Market

Tyro Capital tackles ghosting, girl power, and the rise of online dating.

Tomohiro Ohsumi/Bloomberg

Tomohiro Ohsumi/Bloomberg

An unusual asset management paper has been making a splash on Twitter. It’s about dating.

Tyro Capital Management, led by portfolio manager and social media star Dan McMurtrie and co-founder Alex Draime, tackled the rise of online dating and its effects on the partner market. The paper noted that the majority of new relationships now begin with apps — a conservative estimate being at least 65 percent but likely more than 75 percent.

Yet at the same time, surveys show a spike in the portion of people reporting that they met in bars or restaurants. “In data science, the technical term for these reporting individuals is ‘liars,’” McMurtrie and Draime wrote. “They reported meeting in a bar because that is technically where the pair met in person for the first time, but the match was generated online.”

Thanks to apps like Tinder, transaction costs have become effectively zero in the contemporary romance market, the authors explained. Apps are free, and furthermore, the social costs of trying and rejecting potential mates plummet when one has no community ties. Hence, the “ghosting” phenomenon, where a potential mate simply disappears and ceases communication rather than have an awkward breakup conversation.

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In this revamped world, women of “prime reproductive age” have become far more powerful, the paper argued. Rejecting men with an iPhone swipe removes the physical risk of doing so in person — that a man will become angry and harm a woman for daring to turn down his advance.

“The options available to women on their phones mean they do not have to participate in some preexisting social power structures that function to limit their overall life options,” the Tyro paper said. “The cascading implications are profound. Some may quibble with this view as it applies to developed countries, but the online dating phenomenon is intersecting with culture in a major way in emerging markets, particularly in Muslim countries.”

All of Tyro’s staff members listed on its website are men, but the paper’s popularity may be due in part to their insight into dynamics beyond their own gender.

But the authors cautioned against requesting their counsel on matters of the heart and loins.

“Ask literally anyone other than a hedge fund guy for dating advice,” the paper said. “Seriously.”