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An Analysis of Search and Authentication Strategies for Online Matching Platforms

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  • Amit Basu

    (Information Technology and Operations Management, Cox School of Business, Southern Methodist University, Dallas, Texas 75275)

  • Sreekumar Bhaskaran

    (Information Technology and Operations Management, Cox School of Business, Southern Methodist University, Dallas, Texas 75275)

  • Rajiv Mukherjee

    (Information Technology and Operations Management, Cox School of Business, Southern Methodist University, Dallas, Texas 75275)

Abstract

Compared to offline matching markets, online matching platforms improve search in the matching process but at the same time increase the problem of authenticating the features and credentials of prospective matches. This paper examines the interplay between these two processes in online matching, using game-theoretic models. We examine whether an online matching platform should target a broad market of match-seekers or an exclusive group of high-value match-seekers, and how the platform should price its search and authentication services. Our results provide valuable insights for online matching platforms regarding the decision to offer authentication services in addition to search services, and guidelines for the pricing and positioning of these services. For instance, we show that the complementarity of the platform’s optimal pricing for search and authentication services can justify the platform’s offering an authentication service as a loss leader, and that higher-quality authentication services may not always justify higher authentication fees. We also develop guidelines for the platform’s optimal strategies for different market conditions.The online appendix is available at https://doi.org/10.1287/mnsc.2018.3056 . This paper was accepted by Chris Forman, information systems.

Suggested Citation

  • Amit Basu & Sreekumar Bhaskaran & Rajiv Mukherjee, 2019. "An Analysis of Search and Authentication Strategies for Online Matching Platforms," Management Science, INFORMS, vol. 67(5), pages 2412-2431, May.
    • Handle: RePEc:inm:ormnsc:v:65:y:2019:i:5:p:2412-2431
    DOI: 10.1287/mnsc.2018.3056
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    Cited by:

    1. Jaehwuen Jung & Hyungsoo Lim & Dongwon Lee & Chul Kim, 2022. "The Secret to Finding a Match: A Field Experiment on Choice Capacity Design in an Online Dating Platform," Information Systems Research, INFORMS, vol. 33(4), pages 1248-1263, December.
    2. Sui, Ronghua & Zhang, Xumei & Dan, Bin & Zhang, Haiyue & Liu, Yi, 2023. "Bilateral value-added service investment in platform competition with cross-side network effects under multihoming," European Journal of Operational Research, Elsevier, vol. 304(3), pages 952-963.
    3. Jin Li & Gary Pisano & Yejia Xu & Feng Zhu, 2023. "Marketplace Scalability and Strategic Use of Platform Investment," Management Science, INFORMS, vol. 69(7), pages 3958-3975, July.
    4. Wentao Gao & Hao Zhang & Jianfeng Lu & Tiaojuan Han, 2023. "Research on Green Supply Chain Formation and Government Subsidy Pricing Strategy Considering an Online Trading Platform," Sustainability, MDPI, vol. 15(19), pages 1-24, September.
    5. Hongchang Wang & Benjamin Williams & Karen Xie & Wei Chen, 2024. "Quality Differentiation and Matching Performance in Peer-to-Peer Markets: Evidence from Airbnb Plus," Management Science, INFORMS, vol. 70(7), pages 4260-4282, July.
    6. Huixin Liu & Feng Du, 2023. "Research on E-Commerce Platforms’ Return Policies Considering Consumers Abusing Return Policies," Sustainability, MDPI, vol. 15(18), pages 1-19, September.
    7. Zheng, Zhijun & Li, Gang & Cheng, T.C.E & Wu, Feng, 2022. "Offline supplementary service strategies for the online marketplace: Third-party service or marketplace service?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    8. Chenglong Zhang & Jianqing Chen & Srinivasan Raghunathan, 2022. "Two-Sided Platform Competition in a Sharing Economy," Management Science, INFORMS, vol. 68(12), pages 8909-8932, December.

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