Abstract
There exist thick market externalities in taxi spot markets, that larger market will make service transactions more efficient. When heterogeneous customers visit a market, there also arises mismatching externality that taxicabs could be mismatched with the types of customers not to be preferred. If spot markets are differentiated based upon efficient matching pairs of taxicabs and customers, information asymmetry between customers and taxies could be partly resolved, eventually increasing matching efficiency between taxicabs and customers. In this paper, equilibrium models of spot markets are presented incorporating both thick market economies and mismatching diseconomies. The impacts of fare regulation of taxicabs and market differentiation policies upon social welfare are also investigated by simple numerical examples.
