Dutch Auctions in Matching Markets with Waiting Costs

Thomas Pitz and Vinicius Ferraz

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Abstract: When time-to-contract is payoff-relevant, how should a matching platform choose between a descending-clock (Dutch) mechanism and posted prices? We introduce a timing--entry--volume (TEV) framework that traces the causal chain from mechanism format through contracting speed, participation incentives, match volume, and revenue. Against immediate posted prices, dominance depends on the earnings and timing gaps and may hold for all waiting costs, only above a floor~$\lambda^*$, only below a ceiling~$\lambda^{**}$, or not at all. Against a batch-clearing benchmark, Dutch dominates through both timing and payment channels. In the two-sided extension, cross-side complementarity amplifies a one-sided advantage into equilibrium dominance on both sides, with welfare gains when match surplus is sufficiently large. All dominance conditions are stated in estimable quantities.

Date: 2026-04
New Economics Papers: this item is included in nep-des and nep-mic
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