Can markets help?: applying market mechanisms to improve synchronous communication

  • Authors:
  • Gary Hsieh;Robert Kraut;Scott E. Hudson;Roberto Weber

  • Affiliations:
  • Carnegie Mellon University, Pittsburgh, PA, USA;Carnegie Mellon University, Pittsburgh, PA, USA;Carnegie Mellon University, Pittsburgh, PA, USA;Carnegie Mellon University, Pittsburgh, PA, USA

  • Venue:
  • Proceedings of the 2008 ACM conference on Computer supported cooperative work
  • Year:
  • 2008

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Abstract

There is a growing interest in applying market mechanisms to tackle everyday communication problems such as communication interruptions and communication overload. Prior analytic proofs have shown that a signaling and screening mechanism can make senders and recipients of messages better off. However, these proofs make certain assumptions that do not hold in real world environments. For example, these prior works assume that there are no transaction costs in a communication market and that monetary incentives are the only motivators in communication between strangers. This research builds upon prior analytic work and empirically tests the validity of the claim that signaling and screening mechanisms will improve communication welfare. Our results show that while these types of markets can indeed improve communication welfare, a simpler, less expressive fixed-price market can lead to higher welfare than a more expressive, variable pricing and screening mechanism. Findings from this study also provide valuable insights for technology designs. For example, these results suggest the need to reduce cognitive overhead in using communication markets.