Sorting based on observable features such as gender and race has a widespread negative perception. Peer-to-peer markets, fostered by the boom of online apps, are no exception to this trend. Policymakers around the globe are urging platforms to reduce the information that users have to share through their profile pictures and names. Nevertheless, observable features may be essential to build trust, especially for specific population segments, and trust can be critical for them to participate in these markets fully. To understand the implications of profile information on women's participation and ethnic sorting, we focus on BlaBlaCar, the world´s leading car-sharing platform for non-professional drivers and passengers. A novel dataset is constructed covering detailed information on all the users on both market sides and all transactions in the routes that connect 8 of the biggest cities in France, between October 2020 and March 2021. Using a structural framework that accommodates the main strategic decisions of both market sides, this paper shows that women prefer to travel with other women and that there exists a significant degree of ethnic-based homophily. This paper also provides evidence that alternative designs limiting the sorting capacities of users do not necessarily benefit ethnic minorities and that women from the ethnic majority tend to be the population segment whose participation and welfare reduces the most when anonymous marketplaces are imposed.
Sorting based on observable features such as gender or race has a widespread negative perception. Peer-to-peer markets, fostered by the boom of online applications, are no exception to this trend. Policymakers around the globe are urging platforms to reduce the information that users share through their profile pictures and names, as a way to prevent discrimination. Given the role that observable features play building users’ trust, these measures may hinder their participation in asymmetric fashion, affecting especially specific population segments. To analyze the implications of profile information on female participation and ethnic sorting, I focus on BlaBlaCar, the world´s leading car-sharing platform for non-professional drivers and passengers. I construct a novel data set that contains detailed information of all the users on both market sides and all transactions in the routes that connect eight of the largest cities in France, between October 2020 and March 2021. Using a structural framework that accommodates the main strategic decisions of both market sides, this paper shows that women prefer to travel with other women and that there exists a substantial degree of ethnic-based homophily. This paper also provides evidence that alternative designs limiting the sorting abilities of users do not necessarily benefit ethnic minorities and that women from the ethnic majority tend to be the population segment whose participation and welfare reduces the most when anonymous marketplaces are imposed.
In a standard durable goods problem, a monopolist that fully commits to a sequence of output earns higher profits than a monopolist that cannot commit. This well-established result is mitigated when we introduce vertical relations, as full commitment may decrease the sum of retailer and manufacturer profits by exacerbating the detrimental decrease in output that results from double marginalization. In this paper, we show that the manufacturer can earn higher profits with a contract that implements an intermediate level of commitment. We also show that total industry profits may be maximized by decreasing the contract length between manufacturer and retailers, limiting commitment to an intermediate level. In this sense, we show that contract length can counteract the time consistency and double marginalization effects, becoming a strategy that firms may adopt to maximize profits.
While the durable goods literature in industrial organization has considered the choice of durability by the producer an important decision to explain market outcomes, the neoclassical and vintage models of the macroeconomics literature often overlook the choice of the durability of capital. In this paper, I use an endogenous growth framework that characterizes capital-generating firms as durable goods producers to analyze the existing empirical evidence in terms of GDP per capita growth rates, the decline in the relative price of capital, and the capital depreciation rates. In this setting, I show that, under mild conditions, breaking economies (economies with capital that depreciates faster) have more incentives to invest in productivity-enhancing technologies. In turn, I show that these increased incentives accelerate the decline in capital prices and foster GDP per capita growth even when capital follows a constant depreciation rate pattern.