Niedermayer, Andras; Shneyerov, Artyom
(16. July 2013):
For-Profit Search Platforms.
SFB/TR 15 Discussion Paper No. 436
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Abstract
We consider optimal pricing by a profit-maximizing platform running a dynamic search
and matching market. Buyers and sellers enter in cohorts over time, meet and bargain
under private information. The optimal centralized mechanism, which involves posting a
bid-ask spread, can be decentralized through participation fees charged by the intermediary
to both sides. The sum of buyers’ and sellers’ fees equals the sum of inverse hazard rates
of the marginal types and their ratio equals the ratio of buyers’ and sellers’ bargaining
weights. We also show that a monopolistic intermediary in a search market may be welfare
enhancing.