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A theory of targeted search

  • Cheremukhin, Anton A.

    (Federal Reserve Bank of Dallas)

  • Tutino, Antonella

    (Federal Reserve Bank of Dallas)

  • Restrepo-Echavarria, Paulina

    (Ohio State University)

We present a theory of targeted search, where people with a finite information processing capacity search for a match. Our theory explicitly accounts for both the quantity and the quality of matches. It delivers a unique equilibrium that resides in between the random matching and the directed search outcomes. The equilibrium that emerges from this middle ground is inefficient relative to the constrained Pareto allocation. Our theory encompasses the outcomes of the random matching and the directed search literature as limiting cases.

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Paper provided by Federal Reserve Bank of Dallas in its series Working Papers with number 1402.

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Length: 55 pages
Date of creation: 13 Feb 2014
Date of revision:
Handle: RePEc:fip:feddwp:1402
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  1. Moen, Espen R, 1997. "Competitive Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 385-411, April.
  2. Margaret Stevens, 2007. "New Microfoundations For The Aggregate Matching Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(3), pages 847-868, 08.
  3. Vives, X., 1988. "Nash Equilibrium With Strategic Complementarities," UFAE and IAE Working Papers 107-88, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  4. Rochet, Jean-Charles & Tirole, Jean, 2003. "Platform Competition in Two-Sided Markets," IDEI Working Papers 152, Institut d'Économie Industrielle (IDEI), Toulouse.
  5. Robert Shimer & Veronica Guerrieri, 2012. "Markets with Multidimensional Private Information," 2012 Meeting Papers 1192, Society for Economic Dynamics.
  6. Tayfun Sönmez & Alvin E. Roth & M. Utku Ünver, 2007. "Efficient Kidney Exchange: Coincidence of Wants in Markets with Compatibility-Based Preferences," American Economic Review, American Economic Association, vol. 97(3), pages 828-851, June.
  7. Guido Menzio, 2007. "A Theory of Partially Directed Search," Journal of Political Economy, University of Chicago Press, vol. 115(5), pages 748-769, October.
  8. Alvin E. Roth & Tayfun Sönmez & M. Utku Ünver, 2004. "Kidney Exchange," The Quarterly Journal of Economics, MIT Press, vol. 119(2), pages 457-488, May.
  9. Philipp Kircher, 2009. "Efficiency of simultaneous search," LSE Research Online Documents on Economics 29703, London School of Economics and Political Science, LSE Library.
  10. Tayfun Sönmez & M. Utku Ünver, 2009. "Matching, Allocation, and Exchange of Discrete Resources," Boston College Working Papers in Economics 717, Boston College Department of Economics.
  11. Peter Coles & John Cawley & Phillip B. Levine & Muriel Niederle & Alvin E. Roth & John J. Siegfried, 2010. "The Job Market for New Economists: A Market Design Perspective," Journal of Economic Perspectives, American Economic Association, vol. 24(4), pages 187-206, Fall.
  12. Alvin E. Roth & Tayfun Sönmez & M. Utku Ünver, 2005. "Efficient Kidney Exchange: Coincidence of Wants in a Structured Market," Boston College Working Papers in Economics 621, Boston College Department of Economics.
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  16. Susan E. Woodward & Robert E. Hall, 2012. "Diagnosing Consumer Confusion and Sub-optimal Shopping Effort: Theory and Mortgage-Market Evidence," American Economic Review, American Economic Association, vol. 102(7), pages 3249-76, December.
  17. Hall, Robert E., 1979. "A theory of the natural unemployment rate and the duration of employment," Journal of Monetary Economics, Elsevier, vol. 5(2), pages 153-169, April.
  18. Shouyong Shi, 2002. "A Directed Search Model of Inequality with Heterogeneous Skills and Skill-Biased Technology," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 467-491.
  19. M.Utku Unver, 2004. "Unraveling Yields Inefficient Matching: Evidence from Post-Season College Football Bowls," Working Papers 259, University of Pittsburgh, Department of Economics, revised Jan 2004.
  20. Jason Brown & Mark Duggan & Ilyana Kuziemko & William Woolston, 2011. "How does Risk Selection Respond to Risk Adjustment? Evidence from the Medicare Advantage Program," NBER Working Papers 16977, National Bureau of Economic Research, Inc.
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  28. Diamond, Peter A, 1982. "Wage Determination and Efficiency in Search Equilibrium," Review of Economic Studies, Wiley Blackwell, vol. 49(2), pages 217-27, April.
  29. repec:lmu:muenar:20321 is not listed on IDEAS
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