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Stable Partnerships, Matching, and Local Public Goods

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  • Simon Clark

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  • Ravi Kanbur

Abstract

In the presence of local public goods differences in tastes are an important determinant of the way in which partnerships are formed. Heterogeneity in tastes for private vs. public goods produces a tendency to positive assortment and partnerships of couples with similar tastes; heterogeneity in tastes for different public goods brings about partnerships of couples with similar tastes only if there is a significant overlap in the distribution of tastes of the two groups to be matched. We show that with two public goods we may get negative assortment, pure positive assortment being only one of many possibilities.

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Bibliographic Info

Paper provided by Edinburgh School of Economics, University of Edinburgh in its series ESE Discussion Papers with number 82.

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Length: 37
Date of creation: Mar 2004
Date of revision:
Handle: RePEc:edn:esedps:82

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Keywords: Matching; sorting; local public goods; heterogeneity of tastes;

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  1. Michael Peters & Aloysius Siow, 2001. "Competing Premarital Investment," Working Papers peters-01-02, University of Toronto, Department of Economics.
  2. Junsen Zhang & Pak-Wai Liu, 2003. "Testing Becker’s Prediction on Assortative Mating on Spouses’Wages," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
  3. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
  4. Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Working Papers 91-08, University of Washington, Department of Economics.
  5. Konrad, Kai A & Lommerud, Kjell Erik, 1995. " Family Policy with Non-cooperative Families," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 581-601, December.
  6. Roth, Alvin E. & Sotomayor, Marilda, 1992. "Two-sided matching," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 16, pages 485-541 Elsevier.
  7. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
  8. David Lam, 1988. "Marriage Markets and Assortative Mating with Household Public Goods: Theoretical Results and Empirical Implications," Journal of Human Resources, University of Wisconsin Press, vol. 23(4), pages 462-487.
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Cited by:
  1. Suman Ghosh & Alexander Karaivanov & Mandar Oak, 2005. "A Case for Bundling Public Goods Contributions?," Working Papers 05005, Department of Economics, College of Business, Florida Atlantic University.
  2. Schwager, Robert, 2012. "Grade inflation, social background, and labour market matching," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 56-66.
  3. Matthew J. Baker & Joyce P. Jacobsen, 2007. "Marriage, Specialization, and the Gender Division of Labor," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 763-793.
  4. Simon Clark, 2004. "Uniqueness of Equilibrium in Two-sided Matching," ESE Discussion Papers 84, Edinburgh School of Economics, University of Edinburgh.
  5. Simon Clark, 2007. "Matching and Sorting when Like Attracts Like," ESE Discussion Papers 171, Edinburgh School of Economics, University of Edinburgh.

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