Pricing in Matching Markets

George Mailath, Andrew Postlewaite and Larry Samuelson ()
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Larry Samuelson: Department of Economics, Yale University

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

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 valuesas 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: 66 pages
Date: 2010-01-26
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Citations: View citations in EconPapers (3)

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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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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:10-003

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