Marie Bergstrom on Online Dating and Intimacy

And Our Attention Deficit Disorder

The Future of Human Relationships is Machine-Based

My latest podcast  with sociologist Marie Bergstrom is about the brave new world of relationships that originate on dating platforms. Gone are the days of being constrained to one’s social circle. Now we’ve got a deep “liquidity pool” of people looking to connect. Sound like nirvana? Perhaps, but nothing comes for free. Marie lays out the “new laws of love” in her book, so check out what she has to say.

My youth was so different. I went to a co-ed boarding school in India, which was and still is a bit of an anachronism from colonial-era India. We wore uniforms, marched to class, and played much more than we studied. The school was perched on a hilltop to boot, with monkeys swinging among the pine trees. It was the best present my parents gave me.

We would lobby our teachers for “socials” every chance we got, like if we won a sports match against a bitter rival, or if we sensed that the headmaster was in a good mood. The socials would happen in Barne Hall (named after a Reverend) under the watchful eye of our teachers. Talk about a damper. And then you had to walk the length of the hall in full view of everyone to ask someone nicely for a dance. It was terrifying. As I put it in my conversation with Marie, the “cost of attempt” was very high and the “cost of error” was even higher. You had to choose your attempt very carefully.

Platforms have reduced the cost of attempt and the cost of error to zero.

But we ain’t seen nuttin’ yet, I think, in terms of potential for intelligent machines in this space. There’s a wonderful episode of Black Mirror called “Hang the DJ,” where the machine creates matches with an expiration time, typically between 12 hours and a year or two. During this time, which can be anything between torture and bliss, the machine collects the data to improve its next recommendation. The end goal is to produce the ultimate match with no expiration date.

It will be interesting to see whether platforms will move in that direction as technology progresses, and whether it will lead to happier relationships. Another potential path for matching platforms is the metaverse. You or your avatar can now go on an online date and earn a crypto token! The expectation here is that the immersive experience will include sexual pleasure through VR and sensor hardware. A brave new world indeed, beyond what Huxley could have ever imagined.

Data as the New Opium

The latest “No Mercy No Malice” blog by my colleague Scott Galloway got my attention. Scott mentions an incident he experienced over lunch while vacationing with a friend whose son lay still on his side for hours on Tiktok, completely comatose, except for an occasional swipe. It reminded Scott of opium dens in China.

For me, it conjured up images from the 19th century “opium wars,” described in a trilogy by writer Amitav Ghosh. The British ruled India during that time, and flooded China with Indian opium in exchange for tea and silver. The US demanded its own set of concessions from the Chinese, who had little choice but to accept them. It was China’s “century of humiliation.”  Tiktok is now playing tit-for-tat, supplying us with digital opium that is produced by its users  using its cleverly designed tools. The data is collected at a high frequency due to the interactive nature of the platform.

Netflix, for example, obtains a data point or two per day per user. Tiktok gets dozens. The higher frequency really matters, and here’s how to think about the economics. In the world of trading, which I’ve been immersed in for a few decades, if two machines have the same “edge,” meaning that the probability of a prediction being correct is identical, the one that trades 10 times as frequently will outperform by roughly five-fold. But the finer grained data makes it possible to predict things you couldn’t otherwise.  While Netflix tries to predict whether you like horror movies, Tiktok can predict what genre of horror you like and will encourage you to produce great horror clips that others will like, possibly making you rich and/or famous in the process. Tiktok collects data on the whole “watch, create, share” cycle. The attention is invaluable.

The proof is in the pudding. Between 2017 and 2021, Netflix’s revenue doubled to roughly 30 billion dollars whereas that of ByteDance, Tittok’s owner, grew roughly 15-fold, to 58 billion.

When you have attention, you have power.

The Attention War and The New Economics of Data

In 1978, Herbert Simon won the Nobel prize in economics for telling us that the scarcity of human attention renders us “boundedly rational.” We choose the first satisfactory choice instead of the best one, because finding the best one can be very costly.

Simon’s theory predated the Internet. While his logic was compelling and obvious, there was no way to measure attention in the physical economy. Prior to the Internet, would anyone know what you watched, read, or listened to during the day? Now attention is carefully measured.

Let’s quantify attention. According to Scott’s calculations, TikTok was watched for 22.6 trillion minutes in 2021. The total yearly attention of a world of 5 billion people is slightly under 3 quadrillion minutes. I think Scott’s estimate is high, but even if it 10 times the actual number, TikTok has almost one-fifth of a percentage point of the world’s total attention. That’s staggering. Netflix is worth 80 million. Bytedance is worth almost five times that. It’s not because of capital or labor. They are both capital light and don’t employ a lot of people. It’s the data.

Perhaps it is time to modernize economics and acknowledge the importance of attention. In my conversation with Erik Brynjolfsson, I asked him why economists focus on capital and labor, and ignore what is now arguably the most important determinant of business value: data. Listen to Erik’s response. There’s a reason why Tiktok is worth almost 400 billion dollars. Data and attention.

We are at a point in history where we really need to pay attention.