The matching function for electronic market places: determining the probability of coordinating of supply and demand

Electronic market places have the function of coordinating the supply and demand in the World Wide Web (WWW) on a central platform. This coordination service is frequently offered by a central operator (the so-called market operator), who actively intervenes in the market as an organiser or broker. The operator collects the bids and asks in a database and orders them according to a specific coordination mechanism (the so-called matching). This paper analyses the coordination function (concretely reflected in the matching function) of an electronic market place according to the aspects of competition. The result of the analysis is a matching function. Using this function, we can determine the ‘strength of competition’ of an electronic market place as measured by the probability of the successful mapping between supply and demand.