Thursday, 25 June 2015

Matching markets in everything: Sugar-daddy edition

Oh, but how the internet reduces transactions costs and facilitates trade.

Today's edition: what happens when somebody needs income support through university and is willing to supply friendly companionship, and somebody else seeks the opposite? From this week's Economist:
Students who post profiles on know what they want, so “it’s almost like a business partnership”, says Angela Bermudo, a spokesman for the company. The site hosts some 900,000 profiles of sugar babies enrolled in American universities, up from 458,000 two years ago. Their ranks swelled during the recession and are still growing fast, says Brandon Wade, the site’s founder. A year ago nearly 1,200 students with an e-mail account belonging to an American university posted a profile on the site every day; the daily average has risen to about 2,000. The site has even stopped advertising online. Its ads used to pop up with search results for terms such as “student loan”.
The boom is fuelled by increased acceptance of “sugaring” (dating for money), says Steven Pasternack, the owner of a Miami firm known as Sugardaddie. The company’s site gets more than 5,000 new profile uploads worldwide every day. A quarter are students. Astute marketing helps. Sugardaddie’s pitch notes that it does not “discriminate against people’s desires”. Sugar babies are increasingly advised to negotiate not an “allowance”, but rather a certain “lifestyle” in exchange for dates. These arrangements can remain discreet. New Yorker Keith and the younger woman he met online, seeking a sugar daddy to pay for college, both tell friends that they met in a bar. His weekly $500 deposits into her bank account will cease, he says, if she becomes unavailable.
The article says young men are generally out of luck, as few older women are in the market seeking such arrangements.


  1. It's a glorified escort service. As an Atlantic article on it pointed out, less than half of the "babies" are students, with "student" being defined as someone with a college e-mail address or proof of employment. We also don't know what the "success" rate is for prospective "sugar daddies" in going on dates with women, but I'll bet it's low.

    I wouldn't be surprised if those numbers are higher than reality, as well. How many of them are trial accounts that have been abandoned, or fake accounts created by staff of the company to draw men in? I've heard accusations that Ashley Madison has done the latter.

  2. Thanks for the pointer. I've not tried out either of those services so hard for me to judge.