Large-Scale Service Marketplaces: The Role of the Moderating Firm

Gad Allon (), Achal Bassamboo () and Eren B. Çil ()
Additional contact information
Gad Allon: Kellogg School of Management, Northwestern University, Evanston, Illinois 60208
Achal Bassamboo: Kellogg School of Management, Northwestern University, Evanston, Illinois 60208
Eren B. Çil: Lundquist College of Business, University of Oregon, Eugene, Oregon 97403

Management Science, 2012, vol. 58, issue 10, 1854-1872

Abstract: Recently, large-scale, Web-based service marketplaces, where many small service providers compete among themselves in catering to customers with diverse needs, have emerged. Customers who frequent these marketplaces seek quick resolutions and thus are usually willing to trade prices with waiting times. The main goal of this paper is to discuss the role of the moderating firm in facilitating information gathering, operational efficiency, and communication among agents in service marketplaces. Surprisingly, we show that operational efficiency may be detrimental to the overall efficiency of the marketplace. Furthermore, we establish that to reap the "expected" gains of operational efficiency, the moderating firm may need to complement the operational efficiency by enabling communication among its agents. The study emphasizes the scale of such marketplaces and the impact it has on the outcomes. This paper was accepted by Yossi Aviv, operations management.

Keywords: service operations; fluid models; asymptotic analysis; large games; noncooperative game theory (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.1120.1533 (application/pdf)

Related works:
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:inm:ormnsc:v:58:y:2012:i:10:p:1854-1872

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().