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Gender-based price discrimination in matching markets

Author

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  • Trégouët, Thomas
Abstract
This paper develops a new model to analyze price discrimination in matching markets where agents have private information about their respective qualities. On the basis of signals (car, clothing, club membership, etc.) purchased from profit-maximizing firms, men and women form beliefs about each other's qualities. The matching must then be stable in the following sense: there cannot be a man and woman who are unmatched and who both believe they would be better off if they were matched with one another. The model enables an analysis of the impact of third-degree (or gender-based) price discrimination on welfare. When third-degree price discrimination is not feasible, the cost of eliciting private information is higher but a monopoly intermediary may have stronger incentives to implement an efficient allocation. I show that gender-based price discrimination is more likely to have a positive impact the more symmetric the matching environment is.

Suggested Citation

  • Trégouët, Thomas, 2015. "Gender-based price discrimination in matching markets," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 34-45.
    • Handle: RePEc:eee:indorg:v:42:y:2015:i:c:p:34-45
    DOI: 10.1016/j.ijindorg.2015.05.007
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    References listed on IDEAS

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    More about this item

    Keywords

    Price discrimination; Gender discrimination; Matching; Signaling; Online dating; Platform;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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