Question

Consider a two-sided platform that matches men and women are interested in finding a marriage partner. The platform sets a price for men to access the platform and the price for women to access the platform. These prices are chosen to maximize the platform’s profits. Assume this is the only platform on the market.

1.What determines which gender pays a higher price?

2.Suppose a massive immigration wave occurs that increases the fraction of young men in the population relative to young women; how will this affect the male and female prices on the platform?

Answer 1

According to industrial organization, the study of two-sided markets is new relatively where agents are consolidated by a platform. These platforms act as intermediary and charge certain fee from one side to provide utility/access to the other side. Prices may be different for different sides.

Coming to the question,

1. This is determined by the necessity of a side either men or women who are in need of the other on the another side but basically they are charged equal and this will be altered with the change in the ratio of either men or women.

2. If the fraction of young men increases relatively to young women, the men are charged more and the women are charged either less or provided free entry depending on the fraction varied to let men gain the utility.