Signalling 'hi jaanu'

In its recent IPO, photo-share app Snapchat sold its shares at just $17 apiece. Put another way, the firm burnt money (gave it away) by selling shares for too little. In doing so, it wooed investors and showed them its bright prospects. Seeing so much cash on the table, investors pounced on 200 million shares that Snapchat was selling. 

If the company had not burnt money, and only boasted that it was on its way to become the next Google, I doubt the IPO would have been a success. In the absence of a signal such as burning money to back its claim, its statement could have been just “cheap talk”. 

Cheap talk and signals such as burning money affect fate in both IPO and online dating markets. It’s not a wide gulf. Companies raise financial capital from the IPO market, just as nerds raise emotional capital from the online dating market. So an investor faces the same problem a woman considering men on a dating site does — who is the special one and who is the loser?

I was a loser, writing “Hi bb” to potential matches on dating sites — my cheap talk getting lost among similar messages from other users. So, to stand out, I considered the extra effort of pestering my matches on Facebook with “Hi bb. Wanna chat?” after they blocked me on dating apps. 

I won’t call that a serious effort, though. In fact, this is another example of cheap talk that doesn’t cost a thing. For example, I can quickly get on Facebook and write “hb” (happy birthday) to someone. That’s just two lower-case letters and five seconds! By comparison, sending birthday cards in olden days cost us effort, time, and money, all signals of seriousness. 

But now when I go to a dating site and say, “Those r sum nice eyes uv got der, bb”, that is cheap talk, because I could say that to everyone I message, and because it doesn’t cost a penny. It’s the IPO equivalent of Snapchat saying “I will become the next Google”, but not signalling that prospect by underpricing its shares. In the absence of any credible signal in my case, the woman, like any IPO investor, has no reason to believe me. In fact, “I bet you say that to all girls” has been a staple of Hindi movies, not just online dating. So, suppose I want to signal that I really mean it. How can I do that? I need to find a way to prove. Truth is, it’s very hard to use signalling in standard online dating. There’s not much you can do to signal interest. Everything is cheap talk. We know that women, for example, are attracted to men who make more money. But online daters claiming to earn a lot of money is cheap talk. You can say you make Rs 1 crore a year, just like Snapchat could say it is on course to become the next Google, and you can even post pictures of yourself in wealthy settings, but thanks to Photoshop, there is no way to tell your profile is accurate.

But one thing that could signal wealth, and bring your psychological well-being into question, is literally burning money, then posting a picture of the lit-up notes illuminating your face. To avert Photoshop suspicions, you could also give a demo on Skype. But all that would be weird, like Snapchat literally burning money in an IPO roadshow instead of underpricing its shares (a classier way of burning money, signalling future wealth, and wooing investors). To dispel oddity, you could explain to her the economic significance of burning notes, that retiring some cash from circulation could bring down inflation by a tick. The woman may think you are rich. And depending on her taste for eccentricity, environmental concerns over burning money, and inflation expectations, it may or may not work.    

  

Some dating sites understand that’s a tall order. Hence, they sell virtual roses, a classier way of burning money. So if I send her many virtual roses, she would know they cost a lot of money. That would make her more likely to respond. Please note that even digital roses may not matter much for the most sought-after dates. Only the less sought-after dates are more responsive, for they have already heard a lot of cheap talk in their lives (“I miss u jaanu”) and they value someone backing it up with virtual roses. In sum, both nerds and internet firms burn money figuratively to attract love and capital.
 

ashish.sharma@bsmail.in