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Directed Search on a Platform: Meet Fewer to Match More

Author

Listed:
  • Chengsi Wang

    (Monash University)

  • Makoto Watanabe

    (FEWEB VU University of Amsterdam/Tinbergen Institute)

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.

Suggested Citation

  • Chengsi Wang & Makoto Watanabe, 2021. "Directed Search on a Platform: Meet Fewer to Match More," Monash Economics Working Papers 2021-02, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2021-02
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    meeting technology; directed search; platform; intermediation;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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