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Directed Search on a Platform: Meet Fewer to Match More

Chengsi Wang () and Makoto Watanabe ()

No 2021-02, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: This paper studies a directed search equilibrium in a platform setting with homo- geneous buyers and sellers.We show that a meeting technology, typically controlled by intermediaries, (e.g., advertisement, interview scheduling, or online search pro- tocol) determines the matching outcome as follows. First, a meeting technology that provides full information to market participants is not necessarily efficient. Second, the seller- and buyer-optimal meeting technologies do not require full market transparency either; rather, the latter may be achieved even with the min- imum information. Finally, the efficient matching outcome can be decentralized by a profi t-maximizing platform who adopts a simple fee-setting policy for its intermediation service.

Keywords: meeting technology; directed search; platform; intermediation (search for similar items in EconPapers)
JEL-codes: D83 J64 M37 (search for similar items in EconPapers)
Date: 2021-05
New Economics Papers: this item is included in nep-com, nep-lab and nep-mic
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