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Unraveling in a dynamic matching market with Nash bargaining

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  • Frederick Chen

    (Department of Economics, Wake Forest University)

Abstract

Equilibrium sorting in a finite-horizon, two-sided matching market with heterogeneous agents is considered. It is shown that, if the match production function is additively separable in agent-types and if the division of match output is determined by the Nash bargaining solution, then an unraveling of the market obtains as the unique equilibrium in which all matches are formed in the first period.

Suggested Citation

  • Frederick Chen, 2003. "Unraveling in a dynamic matching market with Nash bargaining," Economics Bulletin, AccessEcon, vol. 3(17), pages 1-6.
    • Handle: RePEc:ebl:ecbull:eb-03c70017
    as

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    References listed on IDEAS

    as
    1. Ettore Damiano & Hao Li & Wing Suen, 2005. "Unravelling of Dynamic Sorting," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(4), pages 1057-1076.
    2. Bloch, Francis & Ryder, Harl, 2000. "Two-Sided Search, Marriages, and Matchmakers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 93-115, February.
    3. Hao Li & Wing Suen, 2000. "Risk Sharing, Sorting, and Early Contracting," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 1058-1087, October.
    4. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-846, July-Aug..
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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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