The Value of User-Specific Information for Two-Sided Matchmakers

This article analyzes the incentives of a monopolistic matchmaker to generate user-specific information. By merging two-sided market modeling with two-sided matching, we derive a micro-foundation of cross-side externalities as a function of the number of potential matches and the accuracy level of u...

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Bibliographic Details
Published in:MAGKS - Joint Discussion Paper Series in Economics (Band 48-2014)
Main Authors: Brühn, Tim, Götz, Georg, Meinusch, Annette
Format: Article
Language:English
Published: Philipps-Universität Marburg 2014
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Online Access:PDF Full Text
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Summary:This article analyzes the incentives of a monopolistic matchmaker to generate user-specific information. By merging two-sided market modeling with two-sided matching, we derive a micro-foundation of cross-side externalities as a function of the number of potential matches and the accuracy level of user-specific information. Incentives to make fixed investments in identification technologies are determined by two effects that work in opposing directions: Whereas economies of scale work in favor of platforms with large customer bases, expected improvements to match quality are more significant for small-scale platforms.
Physical Description:45 Pages
ISSN:1867-3678
DOI:10.17192/es2024.0349