Pricing, Matching, and Bundling: an Equilibrium Analysis of Online Platforms

2026-05-06

AI Summary

This study investigates how online platforms jointly leverage three strategic instruments—pricing (commissions and transaction prices), matching (recommendation and search mechanisms), and bundling (product assortment)—to simultaneously enhance platform revenue and improve overall market welfare. By developing a game-theoretic model of multi-sided interactions and integrating equilibrium analysis with mechanism design theory, the paper systematically uncovers the mechanisms through which the interplay of these levers shapes participant behavior, transaction structures, and value distribution. The findings elucidate the intrinsic coupling among key platform design dimensions and offer theoretical foundations for governance strategies that balance efficiency and fairness in digital markets.

Abstract

Modern online platforms such as marketplaces, ride-hailing services, and food-delivery systems serve a dual role: they are both markets where participants interact and transact, and operators that design and govern how these markets function. These platforms connect multiple sides, for example buyers, sellers, and couriers, facilitating access that would otherwise be difficult to achieve. By setting the rules of the market, platforms determine who participates, how interactions take place, and how value is created and distributed. In response to these rules, participants may behave strategically, deciding whether to join the platform and which transactions to pursue. This thesis studies how platform design affects market outcomes through three key levers: pricing that determines participants' gains when operating on a platform; matching that governs which interactions are feasible among participants; and bundling that shapes the structure of supply when the platform itself acts as a market participant. Across these levers, the goal in this thesis is to understand how platforms can be designed to balance platform profitability with overall market welfare. The first part of this thesis studies pricing, including both the commission fees that participants pay to a platform and the prices associated with each transaction. The second part of this thesis studies matching. By shaping recommendation systems and consumer search, platforms influence which transactions take place. The third part of this thesis analyzes bundling. As a marketplace operator, a platform may be able to source products from sellers and offer them as bundled packages to buyers. Collectively, this thesis shows how pricing, matching, and bundling serve as complementary design levers through which platforms can shape market outcomes.

Problem

• pricing
• matching
• bundling
• online platforms
• market design

Innovation

• pricing
• matching
• bundling
• platform design
• market equilibrium