Arbeitspapier

Search Frictions, Competing Mechanisms and Optimal Market Segmentation

In a market in which sellers compete for heterogeneous buyers by posting mechanisms, we analyze how the properties of the meeting technology affect the allocation of buyers to sellers. We show that a separate submarket for each type of buyer is the efficient outcome if and only if meetings are bilateral. In contrast, a single market with all agents is optimal if and only if the meeting technology satisfies a novel condition, which we call "joint concavity." Both outcomes can be decentralized by sellers posting auctions combined with a fee that is paid by (or to) all buyers with whom the seller meets. Finally, we compare joint concavity to two other properties of meeting technologies, invariance and non-rivalry, and explain the differences.

Language
Englisch

Bibliographic citation
Series: Tinbergen Institute Discussion Paper ; No. 16-036/VI

Classification
Wirtschaft
Bargaining Theory; Matching Theory
Auctions
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Subject
search frictions
matching function
meeting technology
competing mechanisms
heterogeneity

Event
Geistige Schöpfung
(who)
Cai, Xiaoming
Gautier, Pieter
Wolthoff, Ronald
Event
Veröffentlichung
(who)
Tinbergen Institute
(where)
Amsterdam and Rotterdam
(when)
2016

Handle
Last update
31.03.2031, 12:27 PM CEST

Data provider

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Object type

  • Arbeitspapier

Associated

  • Cai, Xiaoming
  • Gautier, Pieter
  • Wolthoff, Ronald
  • Tinbergen Institute

Time of origin

  • 2016

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