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Strategic Limitation of Market Accessibility: Search Platform Design and Welfare

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Listed:
  • Christopher The
  • Chengsi Wang
  • Makoto Watanabe

Abstract

This paper explores the relation ship between market accessibility and various participants welfare in an intermediated directed-search market. For a general class of meeting technologies, we provide a necessary and sufficient condition under which efficiency requires imperfect accessibility, such that each sellers listing is only observed by some but not all buyers. We show that the platform optimally implements the efficient out come, but fully extracts surplus from the transactions it intermediates. We also find that in general, buyers prefer to minimize market accessibility, while sellers prefer a weakly greater accessibility level than that which is socially efficient. The efficiency of imperfect accessibility is robust to the introduction of a second chance for unmatched buyers to search.

Suggested Citation

  • Christopher The & Chengsi Wang & Makoto Watanabe, 2023. "Strategic Limitation of Market Accessibility: Search Platform Design and Welfare," CIGS Working Paper Series 23-004E, The Canon Institute for Global Studies.
    • Handle: RePEc:cnn:wpaper:23-004e
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    Cited by:

    1. José L. Moraga-González & Makoto Watanabe & José Luis Moraga Gonzalez, 2023. "Price Equilibrium with Selling Constraints," CESifo Working Paper Series 10583, CESifo.
    2. Carl-Christian Groh, & Jonas von Wangenheim, 2024. "Pigou Meets Wolinsky: Search, Price Discrimination, and Consumer Sophistication," CRC TR 224 Discussion Paper Series crctr224_2024_527, University of Bonn and University of Mannheim, Germany.

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    More about this item

    Keywords

    meeting technology; directed search; platform; intermediation; accessibility JEL Classification: D83; J64; M37;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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