IDEAS home Printed from https://ideas.repec.org/a/eee/matsoc/v90y2017icp63-72.html
   My bibliography  Save this article

Price competition between random and assortive matchmakers

Author

Listed:
  • Chae, Suchan
  • Song, Jaehee

Abstract

We study price competition between heterogeneous matchmakers in a two-sided matching market. It is well known that when two passive matchmakers who provide random matching services compete with entrance fees, there exists no pure-strategy equilibrium. We show that when a passive matchmaker and an active matchmaker, who provides an assortive matching service, compete with entrance fees, there exists a pure-strategy equilibrium. We also provide welfare comparison between the duopoly and a monopoly operating both the passive and active networks.

Suggested Citation

  • Chae, Suchan & Song, Jaehee, 2017. "Price competition between random and assortive matchmakers," Mathematical Social Sciences, Elsevier, vol. 90(C), pages 63-72.
    • Handle: RePEc:eee:matsoc:v:90:y:2017:i:c:p:63-72
    DOI: 10.1016/j.mathsocsci.2017.06.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165489617300987
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.mathsocsci.2017.06.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
    2. Ettore Damiano & Li Hao, 2008. "Competing Matchmaking," Journal of the European Economic Association, MIT Press, vol. 6(4), pages 789-818, June.
    3. Bester, Helmut, 1995. "A bargaining model of financial intermediation," European Economic Review, Elsevier, vol. 39(2), pages 211-228, February.
    4. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
    5. Bloch, Francis & Ryder, Harl, 2000. "Two-Sided Search, Marriages, and Matchmakers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 93-115, February.
    6. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    7. Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-954, August.
    8. Anna Bogomolnaia & Herve Moulin, 2004. "Random Matching Under Dichotomous Preferences," Econometrica, Econometric Society, vol. 72(1), pages 257-279, January.
    9. Heidrun C. Hoppe & Benny Moldovanu & Aner Sela, 2009. "The Theory of Assortative Matching Based on Costly Signals," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 253-281.
    10. Konrad Podczeck & Daniela Puzzello, 2012. "Independent random matching," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(1), pages 1-29, May.
    11. Ford, James Scott & Rutherford, Ronald C. & Yavas, Abdullah, 2005. "The effects of the internet on marketing residential real estate," Journal of Housing Economics, Elsevier, vol. 14(2), pages 92-108, June.
    12. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-846, July-Aug..
    13. Ettore Damiano & Hao Li, 2007. "Price discrimination and efficient matching," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 30(2), pages 243-263, February.
    14. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
    15. Michihiro Kandori, 1992. "Social Norms and Community Enforcement," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(1), pages 63-80.
    16. Alvin E. Roth, 1982. "The Economics of Matching: Stability and Incentives," Mathematics of Operations Research, INFORMS, vol. 7(4), pages 617-628, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Renato Gomes & Alessandro Pavan, 2013. "Cross-Subsidization and Matching Design," Discussion Papers 1559, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    2. Jullien, Bruno & Pavan, Alessandro & Rysman, Marc, 2021. "Two-sided Markets, Pricing, and Network Effects," TSE Working Papers 21-1238, Toulouse School of Economics (TSE).
    3. De Fraja, Gianni & Sákovics, József, 2012. "Exclusive nightclubs and lonely hearts columns: Non-monotone participation in optional intermediation," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 618-632.
    4. Mazali, Rogério & Rodrigues-Neto, José A., 2013. "Dress to impress: Brands as status symbols," Games and Economic Behavior, Elsevier, vol. 82(C), pages 103-131.
    5. Heidrun Hoppe & Benny Moldovanu & Emre Ozdenoren, 2011. "Coarse matching with incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 47(1), pages 75-104, May.
    6. Gomes, Renato & Pavan, Alessandro, 2016. "Many-to-many matching and price discrimination," Theoretical Economics, Econometric Society, vol. 11(3), September.
    7. Renato Gomes & Alessandro Pavan, 2011. "Price Discrimination in Many-to-Many Matching Markets," Discussion Papers 1540, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    8. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, September.
    9. Hanna Halaburda & Mikołaj Jan Piskorski & Pınar Yıldırım, 2018. "Competing by Restricting Choice: The Case of Matching Platforms," Management Science, INFORMS, vol. 64(8), pages 3574-3594, August.
    10. Trégouët, Thomas, 2015. "Gender-based price discrimination in matching markets," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 34-45.
    11. Alessandro Pavan & Renato Gomes, 2011. "Many-to-Many Matching Design and Price Discrimination," 2011 Meeting Papers 1212, Society for Economic Dynamics.
    12. Terence R. Johnson, 2019. "Synchronized matching with incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 67(3), pages 589-616, April.
    13. Dietrich, Antje-Mareike, 2016. "Governmental platform intermediation to promote alternative fuel vehicles," Economics Department Working Paper Series 16, Technische Universität Braunschweig, Economics Department.
    14. Ran Abramitzky & Adeline Delavande & Luis Vasconcelos, 2011. "Marrying Up: The Role of Sex Ratio in Assortative Matching," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 124-157, July.
    15. Gabriel Garber & Márcio Issao Nakane, 2016. "Commercial platforms with heterogeneous participants," Working Papers, Department of Economics 2016_02, University of São Paulo (FEA-USP).
    16. Qingmin Liu & George J. Mailath & Andrew Postlewaite & Larry Samuelson, 2012. "Matching with Incomplete Information," Levine's Working Paper Archive 786969000000000551, David K. Levine.
    17. Chris Bidner, 2014. "A spillover-based theory of credentialism," Canadian Journal of Economics, Canadian Economics Association, vol. 47(4), pages 1387-1425, November.
    18. Konrad Podczeck & Daniela Puzzello, 2012. "Independent random matching," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(1), pages 1-29, May.
    19. repec:hrv:faseco:4589709 is not listed on IDEAS
    20. Aliprantis, C.D. & Camera, G. & Puzzello, D., 2007. "A random matching theory," Games and Economic Behavior, Elsevier, vol. 59(1), pages 1-16, April.
    21. Loertscher, Simon & Niedermayer, Andras, 2020. "Entry-deterring agency," Games and Economic Behavior, Elsevier, vol. 119(C), pages 172-188.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:matsoc:v:90:y:2017:i:c:p:63-72. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505565 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.