Pricing in Matching Markets

George Mailath, Andrew Postlewaite and Larry Samuelson ()
Additional contact information
Larry Samuelson: Cowles Foundation, Yale University, https://economics.yale.edu/people/faculty/larry-samuelson

No 1752, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: Different markets are cleared by different types of prices -- a universal price for all buyers and sellers in some markets, seller-specific prices that are uniform across buyers in others, and personalized prices tailored to both the buyer and the seller in yet others. We introduce the notion of premuneration values -- the values in the absence of any muneration (payments) -- created by the buyer-seller match. We characterize the premuneration values under which uniform-price and personalized-price equilibria agree. In this case, we have efficient allocations, including pre-match investment decisions, without the costs of personalized pricing. We then examine the inefficiencies that arise when the premuneration values preclude the agreement of uniform-price and personalized-price equilibria. We view premuneration values as an important consideration in market design.

Keywords: Directed search; Matching; Premuneration value; Prematch investments; Search (search for similar items in EconPapers)
JEL-codes: C78 D40 D41 D50 D83 (search for similar items in EconPapers)
Pages: 65 pages
Date: 2010-01
New Economics Papers: this item is included in nep-com and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Pricing in Matching Markets (2010)
Working Paper: Pricing in Matching Markets (2010)
Working Paper: Pricing in Matching Markets (2007)
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