A one-shot market with two sides is considered where everybody can be matched with at most one person. Individuals have to find trading partners on their own. Whether searching or waiting is the optimal strategy is the central question of this paper. In a market where searching and waiting are done exclusively by one market side, it is more efficient if the long market side searches. In a market where on both sides some individuals search and others stay put, there are also mixed equilibria which are even more efficient. The matching friction due to uncoordinated search by individuals implies that larger market are in general less efficient than a collection of smaller markets.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.