The feedback effect in two-sided markets with bilateral investments

• 成果类型: Article
• 署名作者: Dizdar, Deniz; Moldovanu, Benny; Szech, Nora
• 署名单位: Universite de Montreal; University of Bonn; Helmholtz Association; Karlsruhe Institute of Technology
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2019.04.002
• 发表日期: 2019
• 页码: 106-142
• 关键词: Matching; signaling; INVESTMENT; Feedback effect

摘要

Agents in a finite two-sided market are matched assortatively, based on costly investments. Besides signaling privately known, complementary types, the investments also directly benefit the match partner. The bilateral external benefits induce a complex feedback cycle that amplifies the agents' signaling investments. Our main results quantify how the feedback effect depends on the numbers of competitors on both sides of the market. This yields detailed insights into the equilibria of two-sided matching contests with incomplete information, in particular for markets of small or intermediate size. It also allows us to shed some new light on the relationship between finite and continuum models of pre-match investment. (C) 2019 Elsevier Inc. All rights reserved.