Two-sided search and perfect segregation with fixed search costs
This paper studies a two-sided search model with the following characteristics: there is a continuum of agents with different types in each population, match utility is nontransferable, and there is a fixed search cost that agents incur in each period. When utility functions are additively separable in types and strictly increasing in the partner's type, there exists a unique matching equilibrium that exhibits perfect segregation as in Smith (1997) and Burdett and Coles (1997); i.e., agents form clusters and mate only within them. The role of additive separability and xed search costs is discussed and contrasted with the discounted case, and an intuitive explanation for the different results obtained in the literature is provided. Also, a simple sufficient condition on the match utility function and the density of types allow us to characterize the duration of the search for each type of agent.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ken Burdett & Randall Wright, 1998.
"Two-Sided Search with Nontransferable Utility,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 220-245, January.
- Kenneth Burdett & Randall Wright, 1994. "Two-sided search," Staff Report 169, Federal Reserve Bank of Minneapolis.
- Ken Burdett & Melvyn G. Coles, 1997. "Marriage and Class," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 141-168.
- Rubinstein, Ariel & Wolinsky, Asher, 1985. "Equilibrium in a Market with Sequential Bargaining," Econometrica, Econometric Society, vol. 53(5), pages 1133-1150, September.
- Arial Rubinstein & Asher Wolinsky, 1985. "Equilibrium in a Market with Sequential Bargaining," Levine's Working Paper Archive 623, David K. Levine.
- 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..
- Laitner, John, 1991. "Modeling Marital Connections among Family Lines," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1123-1141, December.
- Becker, Gary S, 1974. "A Theory of Marriage: Part II," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 11-26, Part II, .