Strategic limitation of market accessibility: Search platform design and welfare

Christopher Teh, Chengsi Wang and Makoto Watanabe

Journal of Economic Theory, 2024, vol. 216, issue C

Abstract: This paper explores the relationship 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 seller's listing is only observed by some but not all buyers. We show that the platform optimally implements the efficient outcome, 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.

Keywords: Meeting technology; Search; Platform; Intermediation; Accessibility (search for similar items in EconPapers)
JEL-codes: D83 J64 M37 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053124000048
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Strategic Limitation of Market Accessibility: Search Platform Design and Welfare (2023)
Working Paper: Strategic Limitation of Market Accessibility: Search Platform Design and Welfare (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:216:y:2024:i:c:s0022053124000048

DOI: 10.1016/j.jet.2024.105798

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().