Search Steering in Two-Sided Platforms

41 Pages Posted: 31 May 2022 Last revised: 2 Dec 2022

See all articles by Pedro Vaissman Guinsburg

Pedro Vaissman Guinsburg

affiliation not provided to SSRN

Gustavo Saraiva

Pontificia Universidad Catolica de Chile

Date Written: May 23, 2022

Abstract

We study the incentives from a two-sided platform to segment the market by providing personalized search results. In our environment, a monopolistic platform matches sellers with buyers. Upon being matched, each pair of buyer and seller negotiate prices. If they choose to transact, the platform receives a commission fee proportional to the value of the transaction plus a flat fee per transaction. The platform is assumed to have full information over customers' and sellers' outside options. We derive sufficient conditions under which the platform's optimal matching is suboptimal from the perspective of buyers and sellers.

Keywords: Market Segmentation, Information Design, Two-sided markets

JEL Classification: C78, D47, D44

Suggested Citation

Vaissman Guinsburg, Pedro and Saraiva, Gustavo, Search Steering in Two-Sided Platforms (May 23, 2022). Available at SSRN: https://ssrn.com/abstract=4117853 or http://dx.doi.org/10.2139/ssrn.4117853

Pedro Vaissman Guinsburg

affiliation not provided to SSRN

Gustavo Saraiva (Contact Author)

Pontificia Universidad Catolica de Chile ( email )

Av Libertador General Bernardo O'Higgins 340
Santiago, RegiĆ³n Metropolitana 8331150
Chile
+56 2 2354 2238 (Phone)

HOME PAGE: http://https://escueladeadministracion.uc.cl/

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