For‐Profit Search Platforms

25 Pages Posted: 30 Jul 2014

See all articles by Andras F. Niedermayer

Andras F. Niedermayer

University of Mannheim - Department of Economics

Artyom A. Shneyerov

University of British Columbia (UBC) - Department of Economics

Date Written: August 2014

Abstract

We consider optimal pricing by a profit‐maximizing platform running a dynamic search and matching market. Buyers and sellers enter in cohorts over time, meet, and bargain under private information. The optimal centralized mechanism, which involves posting a bid–ask spread, can be decentralized through participation fees charged by the intermediary to both sides. The sum of buyers' and sellers' fees equals the sum of inverse hazard rates of the marginal types, and their ratio equals the ratio of buyers' and sellers' bargaining weights. We also show that a monopolistic intermediary in a search market may be welfare enhancing.

Suggested Citation

Niedermayer, Andras Ferenc and Shneyerov, Artyom A., For‐Profit Search Platforms (August 2014). International Economic Review, Vol. 55, Issue 3, pp. 765-789, 2014. Available at SSRN: https://ssrn.com/abstract=2473853 or http://dx.doi.org/10.1111/iere.12070

Andras Ferenc Niedermayer (Contact Author)

University of Mannheim - Department of Economics ( email )

Mannheim 68131
Germany

HOME PAGE: http://andras.niedermayer.ch

Artyom A. Shneyerov

University of British Columbia (UBC) - Department of Economics ( email )

997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
234
PlumX Metrics