Strategic Limitation of Market Accessibility: Search Platform Design and Welfare

Christopher Teh, Chengsi Wang and Makoto Watanabe

No 10507, CESifo Working Paper Series from CESifo

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; directed search; platform; intermediation; accessibility (search for similar items in EconPapers)
JEL-codes: D83 J64 M37 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Strategic limitation of market accessibility: Search platform design and welfare (2024)
Working Paper: Strategic Limitation of Market Accessibility: Search Platform Design and Welfare (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_10507

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