Commercial Platforms With Heterogeneous Participants

Gabriel Garber and Marcio Nakane

No 417, Working Papers Series from Central Bank of Brazil, Research Department

Abstract: We study two-sided markets where there are buyers and sellers, with heterogeneous participants on each side. Buyers care about the quality of the good purchased, but sellers care only about the price they get. When there is informational asymmetry about types between the sides, the role of a platform as a certifier that guarantees a minimum quality becomes central to the transactions. We analyze first-best (perfect information) and pooling equilibria without platforms and a monopolist platform that coexists with an external pooling. We also show there is no equilibrium in a simultaneous game with two platforms.

Date: 2016-01
New Economics Papers: this item is included in nep-com, nep-mic, nep-mkt and nep-net
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Working Paper: Commercial platforms with heterogeneous participants (2016)
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