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Assortative matching through signals

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  • Friedrich Poeschel

Abstract

When agents do not know where to find a match, they search. However, agents could direct their search to agents who strategically choose a certain signal. Introducing cheap talk to a model of sequential search with bargaining, we find that signals will be truthful if there are mild complementarities in match production: supermodularity of the match production function is a necessary and sufficient condition. It simultaneously ensures perfect positive assortative matching, so that single-crossing property and sorting condition coincide. As the information from signals allows agents to avoid all unnecessary search, this search model exhibits nearly unconstrained efficiency.

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Paper provided by Job Market Papers in its series 2013 Papers with number ppo178.

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Date of creation: 07 Dec 2013
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Handle: RePEc:jmp:jm2013:ppo178

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Assortative matching through signals
    by Christian Zimmermann in NEP-DGE blog on 2013-01-19 23:06:20
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Cited by:
  1. Dauth, Wolfgang & Findeisen, Sebastian & Suedekum, Jens, 2013. "The rise of the East and the Far East: German labor markets and trade integration," DICE Discussion Papers 127, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  2. Carlos Canon, 2011. "Matching & Information Provision by One-Sided and Two-Sided Platforms," Working Papers 11-20, NET Institute, revised Oct 2011.
  3. Antoni, Manfred & Heineck, Guido, 2012. "Do Literacy and Numeracy Pay Off? On the Relationship between Basic Skills and Earnings," IZA Discussion Papers 6882, Institute for the Study of Labor (IZA).
  4. Blien, Uwe & Messmann, Susanne & Trappmann, Mark, 2012. "Do reservation wages react to regional unemployment?," IAB Discussion Paper 201222, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  5. Jens Suedekum & Wolfgang Dauth, 2013. "Profiles of local growth and industrial change: Facts and an explanation," ERSA conference papers ersa13p247, European Regional Science Association.
  6. Münich, Daniel & Srholec, Martin & Moritz, Michael & Schäffler, Johannes, 2012. "Mothers and Daughters: Heterogeneity of German direct investments in the Czech Republic. Evidence from the IAB-ReLOC survey," IAB Discussion Paper 201217, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  7. Stops, Michael, 2012. "Job matching across occupational labour markets," IAB Discussion Paper 201227, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  8. Scholz, Theresa, 2012. "Employers' selection behavior during short-time work," IAB Discussion Paper 201218, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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