Tobias Lehmann , University of Lausanne Camille Terrier , Queen Mary University London Rafael Lalive , University of Lausanne
August 31, 2023
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Congestion is a widespread phenomenon in two-sided markets, but evidence on its costs and benefits is limited. Using data from an online dating platform, we document a large excess demand, or congestion, for some women. By exploiting exogenous variation in the number of men and women using the platform, we show that congestion slows down matching time for men. Congestion benefits women who screen men’s profiles quickly, by increasing their choice set. This asymmetry implies that policies aimed at reducing congestion can harm the side of the market that benefits from congestion.
J.E.L classification codes: D4, D47, D62, D83
Keywords:Congestion, two-sided markets, online platforms