Economists wish to use data on matches to learn about the structural primitives that govern sorting. I show how to use equilibrium data on who matches with whom for semiparametric estimation of match production functions in many-to-many, two-sided matching games with transferable utility. Inequalities derived from equilibrium necessary conditions underlie a maximum score estimator of match production functions. The inequalities do not require data on transfers, quotas, production levels, or unmatched agents. The estimator does not suffer from a computational or data curse of dimensionality in the number of agents in a matching market, as the estimator avoids solving for an equilibrium and estimating first-stage match probabilities. I present an empirical application to automotive suppliers and assemblers.
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Length: Date of creation: Oct 2008 Date of revision: Handle: RePEc:nbr:nberwo:14382
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Find related papers by JEL classification: C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment
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