Price Discrimination and Efficient Matching

Ettore Damiano (ettore.damiano@utoronto.ca) and Hao Li

Microeconomics.ca working papers from Vancouver School of Economics

Abstract: This paper considers the problem of a monopoly matchmaker that uses a schedule of entrance fees to sort different types of agents on the two sides of a matching market into exclusive meeting places, where agents randomly form pairwise matches. We make the standard assumption that the match value function exhibits complementarities, so that matching types at equal percentiles maximizes total match value and is efficient. We provide necessary and sufficient conditions for the revenue-maximizing sorting to be efficient. These conditions require the match value function, modified to incorporate the incentive cost of eliciting private type information, to exhibit complementarities along the efficient path of matching types at equal percentiles.

Pages: 0 pages
Date: 2005-03-21, Revised 2005-03-22
New Economics Papers: this item is included in nep-fmk and nep-ind
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Price discrimination and efficient matching (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:pmicro:damiano-05-03-21-12-21-58

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