To answer the question in the title, this paper characterizes the socially efficient organization of the market with search frictions. The efficient organization depends on the relative elasticity in the supply between the two sides of the market, the costs of participating in the market and...

The impact of product variety on welfare has received little attention in the electronic commerce literature. The problem with product variety is that more variety does not necessarily imply higher welfare. This paper finds the conditions under which more variety, if caused by lower fixed costs,...

We analyze the firm-external effects of dynamic prices in a sequential market with a monopolistic firm. The product is offered to an infinite sequence of rational consumers each of whom observes a private signal regarding the product quality. We show that dynamic prices are necessary for...

In online commerce, obfuscation strategies by sellers are hypothesized to mislead consumers to their detriment and to the profit of sellers. One such obfuscation strategy is partitioned pricing in which the price is split into a base price and add-on fees. While empirical evidence suggests that...

The Rule of Reason, which has come to dominate modern antitrust law, allows defendants the opportunity to justify their conduct by demonstrating “procompetitive” effects. Seizing the opportunity, defendants have begun offering increasingly numerous and creative explanations for their...

This article develops a Bayesian persuasion model examining a manager's incentives to gather information when the manager can disseminate this information selectively to interested parties (“users”) and when the objectives of the manager and the users are not perfectly aligned. The model...

In the past two decades, pricing research has paid increasing attention to instances where a product's price is divided into a base price and one or more mandatory surcharges, a practice termed partitioned pricing. Recently, partitioned pricing strategies in the marketplace have become more...

We consider a dynamic market with two firms that sell competing common-value products. The firms offer both products to an infinite set of rational consumers. Each consumer observes a conditionally independent and identically distributed private signal about the product qualities. Consumers...

A choice behavior is rational if it is made in accordance with the maximization of some context-independent preference relation. This paper re-examines the classical questions of implementation theory under complete information in a setting in which players' choices need not be rational and in...

In online commerce, obfuscation strategies by sellers are hypothesized to mislead consumers to their detriment and to the profit of sellers. One such obfuscation strategy is partitioned pricing in which the price is split into a base price and add-on fees. While empirical evidence suggests that...