Many-to-many matching and price discrimination

Artikel

We study centralized many-to-many matching in markets where agents have private information about (vertical) characteristics that determine match values. Our analysis reveals how matching patterns reflect cross-subsidization between sides. Agents are endogenously partitioned into consumers and inputs. At the optimum, the costs of procuring agents-inputs are compensated by the gains from agents-consumers. We show how such cross-subsidization can be achieved through matching rules that have a simple threshold structure, and deliver testable predictions relating the optimal price schedules to the distribution of the agents' characteristics. The analysis sheds light on the practice of large matching intermediaries, such as media and business-to-business platforms, advertising exchanges, and commercial lobbying firms.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Theoretical Economics ; ISSN: 1555-7561 ; Volume: 11 ; Year: 2016 ; Issue: 3 ; Pages: 1005-1052 ; New Haven, CT: The Econometric Society

Classification and Topics

• Classification: Wirtschaft ; Asymmetric and Private Information; Mechanism Design
• Subject: Vertical matching markets ; many-to-many matching ; asymmetric information ; mechanism design ; cross-subsidization

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gomes, Renato ; Pavan, Alessandro
• Event: Veröffentlichung
• (who): The Econometric Society
• (where): New Haven, CT
• (when): 2016

Further information

• DOI: doi:10.3982/TE1904
• Handle: http://hdl.handle.net/10419/150300
• Last update: 10.03.2025, 11:45 AM CET