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Pricing and investments in matching markets

1st Person: Mailath, George J.
Additional Persons: Samuelson, Larry; Postlewaite, Andrew
Type of Publication: Article
Language: English
Published: Wiley 2013
Online: http://hdl.handle.net/10419/150200
id
oai_econstor.eu_10419-150200
recordtype
econstor
institution
MPG
collection
ECONSTOR
title
Pricing and investments in matching markets
spellingShingle
Pricing and investments in matching markets
Mailath, George J.
title_short
Pricing and investments in matching markets
title_full
Pricing and investments in matching markets
title_fullStr
Pricing and investments in matching markets
title_full_unstemmed
Pricing and investments in matching markets
title_sort
Pricing and investments in matching markets
format
electronic Article
format_phy_str_mv
Article
publisher
Wiley
publishDate
2013
language
English
author
Mailath, George J.
author2
Samuelson, Larry
Postlewaite, Andrew
author2Str
Samuelson, Larry
Postlewaite, Andrew
description
Different markets are cleared by different types of prices—seller-specific prices that are uniform across buyers in some markets, and personalized prices tailored to the buyer in others. We examine a setting in which buyers and sellers make investments before matching in a competitive market. We introduce the notion of premuneration values—the values to the transacting agents prior to any transfers— created by a buyer-seller match. Personalized price equilibrium outcomes are independent of premuneration values and exhibit inefficiencies only in the event of “coordination failures,” while uniform-price equilibria depend on premuneration values and in general feature inefficient investments even without coordination failures. There is thus a trade-off between the costs of personalizing prices and the inefficient investments under uniform prices. We characterize the premuneration values under which uniform-price equilibria similarly exhibit inefficiencies only in the event of coordination failures.
url
http://hdl.handle.net/10419/150200
journal
Theoretical Economics
journalStr
Theoretical Economics
Theoretical Economics
issn
1555-7561
up_date
2019-02-15T03:50:14.676Z
_version_
1625505286986924038

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