Matching Plans for Agents with Vertically and Horizontally Differentiated Preferences∗
نویسندگان
چکیده
We develop a location model of price discrimination in many-to-many matching markets in which agents’ preferences are both vertically and horizontally differentiated. The optimal plans induce negative assortative matching at the margin: at any given location, agents with a low value for interacting with agents from the opposite side (the vertical dimension) are included in the matching sets of only those agents from the opposite side whose value for matching is sufficiently high (cross-subsidization). The thresholds for inclusion naturally respect the agents’ mutual attractiveness and joint locations. The analysis has implications for the design of cable TV packages, business-to-business platforms, and advertising. JEL classification: D82 keywords: many-to-many matching, two-sided markets, networks, asymmetric information, incentives, mechanism design ∗Pavan thanks the NSF for financial support under the grant SES-60031281. The usual disclaimer applies.
منابع مشابه
Cross-Subsidization and Matching Design∗
We develop a theory of price discrimination in many-to-many matching markets in which agents’ preferences are vertically and horizontally differentiated. The optimal plans induce negative assortative matching at the margin: agents with a low value for interacting with other agents are included in the matching sets of only those agents from the opposite side whose value for matching is sufficien...
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