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Targeted Search in Matching Markets

Author

Listed:
  • Anton Cheremukhin

    (Federal Reserve Bank of Dallas)

  • Antonella Tutino

    (Federal Reserve Bank of Dallas)

  • Paulina Restrepo-Echavarria

    (Federal Reserve Bank of St Louis and Was)

Abstract

We propose a parsimonious matching model where people's choice of whom to meet endogenizes the degree of randomness in matching. The analysis highlights the interaction between a productive motive, driven by the surplus attainable in a match, and a strategic motive, driven by reciprocity of interest of potential matches. We find that the interaction between these two motives differs with preferences|vertical versus horizontal|and that this interaction implies that preferences estimated using our model can look markedly different from those estimated using a model where the degree of randomness is not endogenous. We illustrate these results using data on the U.S. marriage market and finish by showing that the model can rationalize the finding of aspirational dating.

Suggested Citation

  • Anton Cheremukhin & Antonella Tutino & Paulina Restrepo-Echavarria, 2019. "Targeted Search in Matching Markets," 2019 Meeting Papers 1114, Society for Economic Dynamics.
  • Handle: RePEc:red:sed019:1114
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Les coulisses économiques des sites de rencontres
      by The Conversation in Contrepoints on 2020-08-02 03:35:44

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    Cited by:

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    3. Mackowiak, Bartosz Adam & Matejka, Filip & Wiederholt, Mirko, 2020. "Rational Inattention: A Review," CEPR Discussion Papers 15408, C.E.P.R. Discussion Papers.
    4. Stanislav Rabinovich & Ronald Wolthoff, 2020. "Misallocation Effects of Labor Market Frictions," Working Papers tecipa-662, University of Toronto, Department of Economics.

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    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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