Pricing in Matching Markets
Diﬀerent markets are cleared by diﬀerent types of prices — a universal price for all buyers and sellers in some markets, seller-speciﬁc prices that are uniform across buyers in others, and personalized prices tailored to both the buyer and the seller in yet others. We introduce the notion of premuneration values — the values in the absence of any muneration (payments) — created by the buyer-seller match. We characterize the premuneration values under which uniform-price and personalized-price equilibria agree. In this case, we have eﬀicient allocations, including pre-match investment decisions, without the costs of personalized pricing. We then examine the ineﬀiciencies that arise when the premuneration values preclude the agreement of uniform-price and personalized-price equilibria. We view premuneration values as an important consideration in market design.
Mailath, George J.; Postlewaite, Andrew; and Samuelson, Larry, "Pricing in Matching Markets" (2010). Cowles Foundation Discussion Papers. 2080.