Provable Guarantees for General Two-sided Sequential Matching Markets

Two-sided markets have become increasingly more important during the last years, mostly because of their numerous applications in housing, labor and dating. Consumer-supplier matching platforms pose several technical challenges, specially due to the trade-off between recommending suitable suppliers to consumers and avoiding collisions among consumers' preferences. In this work, we study a general version of the two-sided sequential matching model introduced by Ashlagi et al. (2019). The setting is the following: we (the platform) offer a menu of suppliers to each consumer. Then, every consumer selects, simultaneously and independently, to match with a supplier or to remain unmatched. Suppliers observe the subset of consumers that selected them, and choose either to match a consumer or leave the system. Finally, a match takes place if both the consumer and the supplier sequentially select each other. Each agent's behavior is probabilistic and determined by a regular discrete choice model. Our objective is to choose an assortment family that maximizes the expected cardinality of the matching. Given the computational complexity of the problem, we show several provable guarantees for the general model, which in particular, significantly improve the approximation factors previously obtained

Tackling the Design of Platform-Based Service Systems, Integrating Data and Cultures: The Case of Urban Markets

Different design traditions address the design of services. When adopted alone, they can limit design, especially if services systems are complex. Some combinations among service design traditions are theorized in the literature and a cultural synthesis is considered a priority. This paper discusses a practical application of that synthesis: systematic/data-driven methods from engineering and service innovation are applied within a participatory and transformative environment. Intangible versus material and functional versus experience service elements are considered. The case study on urban markets shows that economics and the transactional/functional mechanics of a service system must be understood for proper design actions, and that overcoming separations between strands of literature is necessary to achieve this aim. Moreover, since urban markets are two-sided platforms in a physical setting, the study allows easier investigation than in modern digital platforms regarding how platform economics affect the design of a service system, providing insights for digital services as well. Originality is due to generally scant contributions on urban market design, since markets are often regulated, rather than designed, beyond the rare practical attempts of cultural synthesis

WeStore or AppStore: how customers shop differently in mobile apps vs. social commerce

In the dynamic e-commerce environment, social commerce has emerged as a revolutionary force, transforming how consumers interact and transact online. This paper investigates the differences in customers’ search and purchase patterns between a prominent online retailer’s burgeoning social commerce channel, the WeChat mini-program, and its native mobile app. We analyze the customers’ entire journey through a sequential search model that encapsulates decisions from channel selection to product search, search termination, and the final purchase. This study contributes to the search model literature by being the first to estimate both fixed and marginal search costs in a sequential search model in an omnichannel retail environment. We calculate fixed search costs, marginal search costs, and preferences for each channel, revealing differences in customers’ behaviors across channels. Our analysis shows that customers’ fixed search costs are higher, but marginal costs are lower on WeChat channel compared to the App channel. Also, customer characteristics like historical spending levels and search timing influence their search costs. From these insights, we suggest strategies tailored to each channel capitalizing on the differences in customers’ search costs. The first strategy encourages search initiation by lowering fixed search costs through peer-to-peer link sharing in the WeChat channel. The second strategy aims to minimize marginal search costs using search-triggering coupons in the App channel. Implementing these strategies significantly boosts conversion rates and profits for the online retailer. This research is one of the first to explore the differences between traditional retail channels and emerging social commerce channels

WeStore or AppStore: How we shop differently in mobile apps vs. social commerce

In the dynamic world of e-commerce, social commerce has emerged as a revolutionary force, transforming the ways consumers interact, explore, and purchase products online. This paper investigates the differences in customers' search and purchase patterns between a prominent online retailer's burgeoning social commerce channel—WeChat mini-program—and its native mobile app. We study customers' entire journey through a sequential search model that captures decisions from channel selection to which products to search, search termination, and final purchase. Our research contributes to the search model literature by being the first to estimate both fixed and marginal search costs in a sequential search model that leverages an omnichannel retail environment and search path data. We calculate fixed search costs, marginal search costs, and preferences for each channel and uncover differences in customers' search and purchase behaviors across channels. Our findings indicate that customers experience higher fixed search costs on WeChat, but lower marginal search costs compared to the mobile app. Additionally, customer characteristics such as historical spending levels and time of search influence their search costs. Based on these insights, we suggest two strategies tailored to each channel that leverages the differences in customers' search costs. The first strategy involves encouraging search initiation by lowering fixed search costs through peer-to-peer link sharing in the WeChat channel, while the second strategy aims to reduce marginal search costs using search-triggering coupons in the App channel. Implementing these approaches leads to a significant increase in conversion rates and profits for the online retailer. Our paper is one of the first to explore the differences between traditional retail channels and emerging social commerce channels

How To Seize a Window of Opportunity: The Entry Strategy of Retail Firms into Transition Economies

In most western countries, grocery retailers are faced with maturing domestic markets with a year-to-year sales growth close to zero. Moreover, most Western-European markets are characterized by a high concentration rate, with a combined market share of the top five players easily exceeding 70%. One important outcome of this evolution has been a growing interest in cross-border initiatives. However, even though the industry gained importance, retailers are still struggling to develop the competencies to compete and survive in this new, more global, arena. In this paper, we study entry investments into Central and Eastern-European transition economies to unveil when, to what extent, and to which retailer the strategic window in these different markets opens. We develop and empirically test a set of hypotheses on factors that affect (1) the speed (timing) and (2) size of retailers’ decisions to enter Central and Eastern European markets. A conceptual framework is proposed which looks at strategic decisions through the option lens. This perspective offers an economic rationale for the behavioral process of major resource allocations. The resulting hypotheses are tested, using a joint hazard/poisson-regression framework, on a data set covering all entry decisions of the top 75 European grocery retailers towards Central and Eastern Europe. We find that in these transition economies important legitimization effects can be derived from rivals’ actions. Especially the moves, made and anticipated, by home rivals are carefully monitored. This reflects the idea that retailers are motivated not only by the chance of creating value in these new markets, but also by the fear of being left out