Welfare Implications in Intermediary Networks

• 成果类型: Article
• 署名作者: Thanh Nguyen; Kannan, Karthik
• 署名单位: Purdue University System; Purdue University
• 刊物名称: INFORMATION SYSTEMS RESEARCH
• ISSN/ISSBN: 1047-7047
• DOI: 10.1287/isre.2020.0970
• 发表日期: 2021
• 页码: 378-393
• 关键词: search; INEFFICIENCY; COMPETITION; EFFICIENCY

摘要

We study the welfare implications of competing middlemen in a two-sided market, where goods are intermediated between providers and purchasers. In our model, each intermediary sets the quantities it intermediates, and the prices are a consequence of a Cournot competition. Our analysis shows that, unlike traditional markets, increasing competition is not always beneficial for market efficiency and that mergers can have an ambiguous effect on efficiency. We also analyze how the underlying network influences social welfare. We define a parameter called the intermediary capacity of the network and show how the price of anarchy depends on this parameter. These results suggest an intuitive and simple measure for the level of competitiveness in a networked market involving intermediaries.