• 2018-02-12


Platforms not only mediate matches but work as information gatekeepers.
When users who have private taste participate in a platform to find their
partner, the platform asks them to provide a matching-relevant information
and subsequently aggregates and distributes the collected data back to each
user to facilitate an effective coordination of matches. How can a platform
design information-flow to make users form matches in a desired way to the
platform? I characterize a two-way communication that employs both verifiable
and non-verifiable messages, and delineate the conditions under which a
platform can (cannot) achieve its ex-post optimal matching outcome using
this communication protocol. In the platform that achieves such an outcome,
users fully reveal their private taste but platform returns personalized and
only filtered information back to each user in the form of a “Recommendation.”
I identify three key factors that enable such communication: 1) The distance
between the distribution of tastes of each side, 2) the uncertainty measure of
each distribution, and 3) the population size. As an application, I also study
a two-way communication protocol with non-verifiable messages and demonstrate
that communication strictly improves efficiency in any circumstances.

JEL Classification: C72, D83

Keywords: Two-sided matching, asymmetric information, verifiable message,
cheap talk, large game