On the Segmentation of Markets
AbstractThis paper endogenizes the market structure of an economy with heterogeneous agents who want to form bilateral matches in the presence of search frictions and when utility is nontransferable. There exist infinitely many marketplaces, and each agent chooses which marketplace to be in: agents get to choose not only whom to match with but also whom they meet with. Perfect segmentation is obtained in equilibrium, where agents match with the first person they meet. All equilibria have the same matching pattern. Although perfect assortative matching is not obtained in equilibrium, the degree of assortativeness is greater than in standard models. (c) 2007 by The University of Chicago. All rights reserved..
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Political Economy.
Volume (Year): 115 (2007)
Issue (Month): 4 (08)
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Web page: http://www.journals.uchicago.edu/JPE/
Other versions of this item:
- Serene Tan & Nicolas L Jacquet, 2005. "On the Segmentation of Markets," 2005 Meeting Papers 456, Society for Economic Dynamics.
- Nicolas L. Jacquet & Serene Tan, 2007. "On the Segmentation of Markets," Labor Economics Working Papers 22449, East Asian Bureau of Economic Research.
- Nicolas L. Jacquet & Serene Tan, 2007. "On the Segmentation of Markets," Working Papers 18-2007, Singapore Management University, School of Economics.
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
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