Effects of market size and competition in two sided markets evidence from online dating by jessica
Effects of Market Size and Competition in Two-Sided Markets: Evidence from Online Dating
Fong, Jessica, Effects of Market Size and Competition in Two-Sided Markets: Evidence from Online Dating (November 2, 2023). Available at SSRN: https://ssrn.com/abstract=3458373 or http://dx.doi.org/10.2139/ssrn.3458373Effects of Market Size and Competition in Two-Sided Markets: Evidence from Online Dating
This paper presents a field experiment designed to independently measure cross-side and same-side network effects. I conduct this experiment in collaboration with an online dating platform to examine how the number of potential matches ("market size") and competitors ("competition size") impact search behavior. The experiment provides a user-level information treatment by indicating the lower bound on the number of men and women near the user's location. I find that on average, an increase in market size deters users from participating in the market. Conditional on participating, market and competition size influence matching decisions. Specifically, an increase in market size causes users to become more selective, whereas competition causes users to become less selective. I discuss potential underlying mechanisms that can explain these empirical findings.
Keywords: digital markets, two-sided matching, platform design, online dating
Suggested Citation: Suggested Citation
Fong, Jessica, Effects of Market Size and Competition in Two-Sided Markets: Evidence from Online Dating (November 2, 2023). Available at SSRN: https://ssrn.com/abstract=3458373 or http://dx.doi.org/10.2139/ssrn.3458373
Jessica Fong (Contact Author)
University of Michigan Ross School of Business ( email )
701 Tappan Ave
Ann Arbor, MI 48109
United States