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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| Published in: | MAGKS - Joint Discussion Paper Series in Economics (Band 48-2014) |
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| Main Authors: | , , |
| Format: | Article |
| Language: | English |
| Published: |
2014
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| Subjects: | |
| 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. |
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| Physical Description: | 45 Pages |
| ISSN: | 1867-3678 |
| DOI: | 10.17192/es2024.0349 |