Large-scale Service Marketplaces: The Role of the Moderating Firm
Recent times have witnessed the emergence of large-scale, web-based service marketplaces where many small service providers compete among themselves on catering to customers with diverse needs. Customers who frequent these marketplaces seek quick resolutions and thus usually trade-off prices with waiting times. The main goal of the paper is to discuss the role of the moderating firm in facilitating information gathering, operational efficiency, and communication among agents. Surprisingly, operational efficiency may be detrimental to the overall efficiency of the marketplace. Further, we show that to reap the "expected" gains of operational efficiency, the moderating firm may need to complement the operational efficiency by enabling communication among its agents. The study emphasizes the large-scale of such marketplaces and the impact it has on the outcomes.
Allon, Gad, Achal Bassamboo and Eren Cil. Forthcoming. Large-scale Service Marketplaces: The Role of the Moderating Firm. Management Science.