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Brühn, Tim
Götz, Georg
Meinusch, Annette
Year of Publication: 
Series/Report no.: 
MAGKS Joint Discussion Paper Series in Economics 48-2014
This paper analyzes the incentives of a monopolistic matchmaker to generate user-specific information in order to increase match-quality and profits. By merging two-sided-markets with two-sided-matching we derive a micro-foundation of cross-side externalities dependent on the number of potential matches and the accuracy-level of user-specific information. Incentives to invest into identification technologies are determined by the scalability of the (fixed) investments and the resulting effect on match-quality. We show that these effects work into opposing directions, i.e., while scalability works in favor for platforms with large customer bases, the effect of identification on match-quality is greater for small scale platforms.
two-sided markets
two-sided matching
segmentation and identification
Document Type: 
Working Paper

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