Competing Matchmaking

Open Access
Publisher Website
Google Scholar
Abstract
We study how matchmakers use prices to sort heterogeneous participants into competing matching markets and how equilibrium out comes compare with monopoly in terms of prices, matching market structure, and sorting efficiency under the assumption of comple- mentarity in the match value function. The role of prices to facilitate sorting is compro- mised by the need to survive price competition. We show that price competition leads to a high-quality market that is insufficiently ex clusive. As a result, the duopolistic outcome can be less efficient in sorting than the monopoly outcome in terms of total match value in spite of servicing more participants. (JEL: C7, D4)

This publication has 25 references indexed in Scilit: