Social and Behavioral Sciences Commons^™

Optimal Information Design In Two-Sided Trade, Pradhi Aggarwal

The Yale Undergraduate Research Journal

In a two-sided market with a broker, the broker can influence the buyer’s and seller’s optimal trading behaviour through strategic information design. We study the impact of information about waiting times on riders and drivers in a rideshare market. We consider three information regimes: the first in which no information about time is revealed, the second in which true waiting times are communicated, and finally an intermediate regime in which agents are only told whether their waiting time falls within a high or low category. We evaluate the optimality of each information regime by maximizing welfare and revenue for each …