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Is assortative matching efficient?

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  • Durlauf,S.N.
  • Seshadri,A.

    (University of Wisconsin-Madison, Social Systems Research Institute)

Abstract

This paper develops some general conditions under which complementarities between individual agents imply that assortative matching is efficient. Our analysis has four main findings. First, when agents are organized into equal-sized groups, just as in Becker (1973), the presence of within-group complementarities is sufficient for stratification to be efficient. Second, if group sizes vary, assortative matching may not be efficient even though complementarities are present, unless particular functional form assumptions are imposed. Third, the connection between assortative matching, complementarities and efficiency reemerges if one considers sequences of replications of the economy in which individual coalitions are uniformly bounded in size. Fourth, the presence of feedbacks from the composition of group memberships has important effects on efficient allocations and breaks any simple link between assortative matching and efficiency. Together, these results suggest that the characterization of the cross-section evolution of an efficiently sorted economy is likely to be highly complex. Copyright Springer-Verlag Berlin Heidelberg 2003

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Paper provided by Wisconsin Madison - Social Systems in its series Working papers with number 22.

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Date of creation: 2001
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Handle: RePEc:att:wimass:200122

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Postal: UNIVERSITY OF WISCONSIN MADISON, SOCIAL SYSTEMS RESEARCH INSTITUTE(S.S.R.I.), MADISON WISCONSIN 53706 U.S.A.

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  1. Edward E. Glaeser & Bruce Sacerdote & Jose A. Scheinkman, 1995. "Crime and Social Interactions," Harvard Institute of Economic Research Working Papers 1738, Harvard - Institute of Economic Research.
  2. Gary S. Becker, 1974. "A Theory of Marriage: Part II," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 11-26 National Bureau of Economic Research, Inc.
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Cited by:
  1. Steven N. Durlauf & Yannis M. Ioannides, 2009. "Social Interactions," Discussion Papers Series, Department of Economics, Tufts University 0739, Department of Economics, Tufts University.
  2. Rege, Mari, 2008. "Why do people care about social status?," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 233-242, May.

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