The Cost of Knowing: Competition and Search Frictions in Market Clearing
Release time：03 March 2026
Mar
06
|
Time & Date
|
10:30 am
-
12:00 pm,
March
06,
2026
(Friday)
|
| TOPIC | The Cost of Knowing: Competition and Search Frictions in Market Clearing |
| TIME&DATE | 10:30 am -12:00 pm, March 6, 2026 (Friday) |
| Venue | Room D504, Teaching Complex D Building |
| Speaker | Yingkang Xie Washington University in St. Louis |
| Abstract | Making information available is often expected to facilitate market clearing. We test this hypothesis using a field experiment on a digital shipping platform by randomizing whether truck drivers observe the current best rival bid when competing for shipment jobs. Revealing competitor prices intensifies price competition. Shipment jobs are more likely to clear either at the posted take-it-now price or at lower negotiated prices. However, contrary to standard efficiency intuition, intensified competition does not increase the volume of successful matches when price drops, but rather slows down the overall market clearing. Drivers are more likely to click away from jobs to avoid competition rather than being nudged to use take-it-now to secure a job. Instead, they reallocate their effort from negotiation toward extensive search, effectively substituting haggling for checking alternative job opportunities. Drivers expand their consideration sets substantially, but matches are not only delayed but cancelled more often. Further analysis reveals a boundary condition that information backfires only when driver supply far exceeds demand; conversely, in less congested markets, showing real-time competition improves job coordination. Our results show that making information available does not necessarily accelerate market clearing: although transparency can reduce bargaining frictions in price discovery, it also induces costly search that offsets its intended efficiency gains. |
| Biography | Professor Xie’s research focuses on platforms and their challenges in pricing, information disclosure, and channel management. He earned his Ph.D. in Marketing from the Kellogg School of Management at Northwestern University in 2023 and has published in Journal of Marketing Research. His work has received 2023 Doctoral Research Award for Best Paper from the American Statistical Association. Professor Xie was the first data scientist hired by Credit Karma, where he built an auction-like ad serving system from the ground up. He also previously worked at Adobe and Facebook, contributing to projects on advertiser behavior and performance in digital marketing. |
