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Specialization, Matching Intensity and Income Inequality of Sellers

Author

Listed:
  • Eleftheriou, Konstantinos
  • Polemis, Michael

Abstract

We develop a simple model with heterogeneous agents and search frictions to study how increases in matching intensity between buyers and sellers determine the level of income inequality among sellers. Our findings indicate that a reduction in search frictions leads to higher inequality and induces buyers to purchase goods and services only from specialized sellers.

Suggested Citation

  • Eleftheriou, Konstantinos & Polemis, Michael, 2016. "Specialization, Matching Intensity and Income Inequality of Sellers," MPRA Paper 74579, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:74579
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    References listed on IDEAS

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    3. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
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    5. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
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    Keywords

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    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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