Stable Marriages and Search Frictions

Stephan Lauermann and Georg Nöldeke

Working papers from Faculty of Business and Economics - University of Basel

Abstract: We embed a two-sided matching market with non-transferable utility, a marriage market, into a random search model. We study steadystate equilibria and characterize the limit of the corresponding equilibrium matchings as exogenous search frictions become small. The central question is whether the set of such limit matchings coincides with the set of stable matchings for the underlying marriage market. We show that this is the case if and only if there is a unique stable matching. Otherwise, the set of limit matchings contains the set of all stable deterministic matchings, but also contains unstable random matchings. These unstable random matchings are Pareto dominated. Thus, vanishing frictions do not guarantee the eciency of decentralized marriage markets.

Keywords: Marriage Market; Stable Matchings; Random Matchings; Search Frictions (search for similar items in EconPapers)
JEL-codes: C78 D83 (search for similar items in EconPapers)
Date: 2012-06-02
New Economics Papers: this item is included in nep-dem, nep-dge and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Journal Article: Stable marriages and search frictions (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bsl:wpaper:2012/10

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