Publication: Meeting technologies and optimal trading mechanisms in competitive search markets
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2014-01-01
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Abstract
In a market in which sellers compete by posting mechanisms, we allow for a general
meeting technology and show that its properties crucially affect the mechanism that sellers
select in equilibrium. In general, it is optimal for sellers to post an auction without a reserve
price but with a fee, paid by all buyers who meet with the seller. However, we define a novel
condition on meeting technologies, which we call invariance, and show that meeting fees are
equal to zero if and only if this condition is satisfied. Finally, we discuss how invariance is
related to other properties of meeting technologies identified in the literature.
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Search frictions, Matching function, Meeting technology, Competing mechanisms