Managing Congestion in Decentralized Matching Markets

Arnosti, Nick; Johari, Ramesh; Kanoria, Yash

doi:10.2139/ssrn.2427960

Cited by 23 publications

(16 citation statements)

References 31 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…whereā i exp(θ i −p i ) andq i is the demand of product i at the equilibrium, i.e., q i ā i /(1+ j∈Sā j ). From the price function in (5) and with some calculations applied to (6), we have the following equations…”

Section: Bertrand Competition Gamementioning

confidence: 99%

“…In a Cournot competition, seller i ∈ S chooses a demand q i to maximize her revenue r i (q) = p i (q) × q i , where the price p i (q) of the product i is determined by the demand vector q in (5). Thus, we express the revenue of sellers in terms of demand vector q.…”

Section: Extensions To Cournot Competition Gamementioning

confidence: 99%

“…Our work is related to the burgeoning literature that studies online platform marketplaces of using control levels other than pricing to influence the market outcomes [5,6,8,25]. Kanoria and Saban designed a framework to facilitate the search for buyers and sellers on matching platforms, and found that simple restrictions on what buyers/sellers can access would boost social welfare [25].…”

Section: Related Workmentioning

confidence: 99%

“…Kanoria and Saban designed a framework to facilitate the search for buyers and sellers on matching platforms, and found that simple restrictions on what buyers/sellers can access would boost social welfare [25]. Arnosti et al investigated the welfare loss due to the uncertainty about seller availability in asynchronous dynamic matching markets, and also found that limiting the visibility of sellers can improve social welfare [5]. Our result, displaying only a subset of products to buyers can increase the equilibrium revenue, extends the findings in these two pieces of work to the context of revenue optimization.…”

Section: Related Workmentioning

confidence: 99%

“…The platform can also use other types of control, such as commissions/subscriptions fees [8], to influence the outcomes of markets. The rich control options for online platforms have led to an increasing discussion about the design of online marketplaces with different optimization objectives [5,6,25,30].…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Optimal Search Segmentation Mechanisms for Online Platform Markets

Zheng

Srikant

2019

Web and Internet Economics

View full text Add to dashboard Cite

Online platforms, such as Airbnb, hotels.com, Amazon, Uber and Lyft, can control and optimize many aspects of product search to improve the efficiency of marketplaces. Here we focus on a common model, called the discriminatory control model, where the platform chooses to display a subset of sellers who sell products at prices determined by the market and a buyer is interested in buying a single product from one of the sellers. Under the commonly-used model for single product selection by a buyer, called the multinomial logit model, and the Bertrand game model for competition among sellers, we show the following result: to maximize social welfare, the optimal strategy for the platform is to display all products; however, to maximize revenue, the optimal strategy is to only display a subset of the products whose qualities are above a certain threshold. We extend our results to Cournot competition model, and show that the optimal search segmentation mechanisms for both social welfare maximization and revenue maximization also have simple threshold structures. The threshold in each case depends on the quality of all products, the platform's objective and seller's competition model, and can be computed in linear time in the number of products.

show abstract

Section: Bertrand Competition Gamementioning

confidence: 99%

Section: Extensions To Cournot Competition Gamementioning

confidence: 99%