Is assortative matching efficient?
This paper develops some general conditions under which complementarities between individual agents imply that assortative matching is efficient. Our analysis has four main findings. First, when agents are organized into equal-sized groups, just as in Becker (1973), the presence of within-group complementarities is sufficient for stratification to be efficient. Second, if group sizes vary, assortative matching may not be efficient even though complementarities are present, unless particular functional form assumptions are imposed. Third, the connection between assortative matching, complementarities and efficiency reemerges if one considers sequences of replications of the economy in which individual coalitions are uniformly bounded in size. Fourth, the presence of feedbacks from the composition of group memberships has important effects on efficient allocations and breaks any simple link between assortative matching and efficiency. Together, these results suggest that the characterization of the cross-section evolution of an efficiently sorted economy is likely to be highly complex. Copyright Springer-Verlag Berlin Heidelberg 2003
Volume (Year): 21 (2003)
Issue (Month): 2 (03)
|Contact details of provider:|| Web page: http://link.springer.de/link/service/journals/00199/index.htm|
|Order Information:||Web: http://link.springer.de/orders.htm|
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.:
- Gary S. Becker, 1974.
"A Theory of Marriage: Part II,"
in: Marriage, Family, Human Capital, and Fertility, pages 11-26
National Bureau of Economic Research, Inc.
- Edward E. Glaeser & Bruce Sacerdote & Jose A. Scheinkman, 1995.
"Crime and Social Interactions,"
Harvard Institute of Economic Research Working Papers
1738, Harvard - Institute of Economic Research.
- Milgrom, Paul & Shannon, Chris, 1994.
"Monotone Comparative Statics,"
Econometric Society, vol. 62(1), pages 157-80, January.
- W. A. Brock, 1993.
"Pathways to Randomness in the Economy: Emergent Nonlinearity and Chaos in Economics and Finance,"
93-02-006, Santa Fe Institute.
- William A. Brock, 1993. "Pathways to randomness in the economy: Emergent nonlinearity and chaos in economics and finance," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 8(1), pages 3-55.
- Gary S. Becker & Kevin M. Murphy, 1994.
"The Division of Labor, Coordination Costs, and Knowledge,"
in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 299-322
National Bureau of Economic Research, Inc.
- Gary S. Becker & Kevin M. Murphy, 1992. "The Division of Labor, Coordination Costs, and Knowledge," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1137-1160.
- Gary S. Murphy Becker & Kevin M., 1992. "The Division of Labor, Coordination Costs, and Knowledge," University of Chicago - George G. Stigler Center for Study of Economy and State 79, Chicago - Center for Study of Economy and State.
- Becker, G.S. & Murphy, K.M., 1991. "The Division of Labor, Coordination Costs, and Knowledge," University of Chicago - Economics Research Center 92-5, Chicago - Economics Research Center.
- Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug..
- Michael Kremer & Eric Maskin, 1996.
"Wage Inequality and Segregation by Skill,"
NBER Working Papers
5718, National Bureau of Economic Research, Inc.
- Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 551-575.
- Michael Kremer & Eric Maskin, 1996. "Wage Inequality and Segregation," Harvard Institute of Economic Research Working Papers 1777, Harvard - Institute of Economic Research.
- Steven N. Durlauf, 1993. "Nonergodic Economic Growth," Review of Economic Studies, Oxford University Press, vol. 60(2), pages 349-366.
- Ionnides, Yannis M, 1990. "Trading Uncertainty and Market Form," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(3), pages 619-38, August.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
- Roland Benabou, 1993.
"Workings of a City: Location, Education, and Production,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 108(3), pages 619-652.
- Roland Benabou, 1991. "Workings of a City: Location, Education, and Production," NBER Technical Working Papers 0113, National Bureau of Economic Research, Inc.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Glenn C. Loury, 1976. "A Dynamic Theory of Racial Income Differences," Discussion Papers 225, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
When requesting a correction, please mention this item's handle: RePEc:spr:joecth:v:21:y:2003:i:2:p:475-493. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.