Search Theory; Current Perspectives
AbstractIn this article I briefly review recent developments in search theory. Particular attention is given to the framework of directed search. I first illustrate the inefficiency that arises in the equilibrium of standard (undirected) search models. Then I provide a formulation of directed search and show that the resulting equilibrium eliminates the inefficiency. Examples of directed search with price posting and auction are provided both for the market with a finite number of individuals and for a large market. After describing the application of search models in monetary theory, I conclude with a remark on the future research.
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Bibliographic InfoPaper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-273.
Length: 17 pages
Date of creation: 12 Dec 2006
Date of revision:
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Phone: (416) 978-5283
Search; Efficiency; Unemployment;
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-13 (All new papers)
- NEP-DGE-2007-01-13 (Dynamic General Equilibrium)
- NEP-MAC-2007-01-13 (Macroeconomics)
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