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| Author: | Damiano E. Hao L. |
| Title: | Competing matchmaking |
| Journal: | Journal of the European Economic Association
2008 : JUN, VOL 6:4, p. 789-818 |
| Index terms: | price control competition |
| Freeterms: | matchmaking price competition |
| Language: | eng |
| Abstract: | We examine how matchmakers use prices to sort heterogeneous participants into competing matching markets and how equilibrium outcomes compare with monopoly in terms of prices, matching market structure, and sorting efficiency under the presumption of complementarity in the match value function. The role of prices to facilitate sorting is compromised by the urge to survive price competition. We point that price competition leads to a high-quality market that is insufficiently exclusive. 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. |
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