Julius Goedde

• Prize for Best Paper, 8th Doctoral Workshop on the Economics of Digitization, TSE.
• Honorable mention for "Best Student Paper", 18th North American UEA Meeting.

Coverage: Blog post by Nick Arnosti

Short Summary: Bluesky

Abstract: A growing number of markets use token money instead of real money to allocate resources, such as class seats, food donations or holiday homes. Agents earn token money by supplying and can only spend tokens by consuming within the system. A platform decides how to set goods’ token prices. Should it i) clear the market, as assumed in canonical competitive equilibrium frameworks, or ii) compress prices and ration excess demand? I characterize in a two-type, two-period model under which preference structures compressing prices increases supply and utilitarian welfare. Intuitively, this is possible when income effects are strong, and participation effects are weak. I confirm the models’ predictions on a large home exchange platform, combining proprietary data on the universe of transactions with several natural experiments. I show empirically that income effects are large and that a reform that reduced the price of attractive homes increased their supply and did not reduce their participation. I confirm that many users have a strong preference against for-money platforms, allowing the exchange platform to set non-market-clearing prices. Broader insights are that lessons from traditional markets may not easily extend to token economies and that market designs without real money can have advantages even in settings where money is common.

Abstract: While traditional two-sided market theory assumes that consumers are locked into one side of the market, we argue that in some cases, consumers may switch sides while staying within the same platform. We develop a theoretical model of a two-sided platform with flexible users who can act as either buyers or sellers, depending on market conditions. We show that these "switchers" can reduce matching inefficiencies in decentralized markets, but paradoxically increase the platform's market power when it sets prices, thereby reducing the surplus of pure buyers and sellers. Using proprietary data from a global ride-sharing platform, we document large-scale switching behavior. Empirical estimates of user preferences show substantial variation in the preference to drive or ride, and confirm that users respond to economic incentives when choosing their role. Our results suggest considerable variation across markets in the net welfare effects of switching. These results suggest that user flexibility should be accounted for in both regulatory analysis and platform design.

Abstract: This paper analyzes the extent to which individuals prefer to exchange with similar people in a market where trust is important. Using unique data from a digital platform for holiday accommodation, we find that suppliers prefer to trade with guests who share similar characteristics. Indeed, when deciding who to trade with, on average, they place more weight on similarity than on guests’ prior ratings. However, analyzing measures of suppliers' post-exchange satisfaction, we find that similarity matters much less than these prior ratings. Suppliers therefore appear to make systematic mistakes by prioritizing similarity over measures of past guest behavior.

Abstract: We develop a structural model of an exchange economy where agents trade indivisible goods (homes) with token-money. Building on Menzel (2015), we identify preferences assuming a stable matching in a large market. We estimate the model using transaction and request data from a large platform for exchanging homes. Observing rejected requests allows us to separately identify preferences of both sides. We quantify the welfare and equity effects of different pricing schemes, the initial token endowment of new users and of using a currency system instead of facilitating only two-way exchanges.