Repeated matching games an empirical framework

Jeremy Fox, Alfred Galichon and Pauline Corblet

No 18/25, CeMMAP working papers from Institute for Fiscal Studies

Abstract: We introduce a model of dynamic matching with transferable utility, extending the static model of Shapley and Shubik (1971). Forward-looking agents have individual states that evolve with current matches. Each period, a matching market with market-clearing prices takes place. We prove the existence of an equilibrium with time-varying distributions of agent types and show it is the solution to a social planner’s problem. We also prove that a stationary equilibrium exists. We introduce econometric shocks to account for unobserved heterogeneity in match formation. We propose two algorithms to compute a stationary equilibrium. We adapt both algorithms for estimation. We estimate a model of accumulation of job-specific human capital using data on Swedish engineers.

Date: 2025-10-07
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Persistent link: https://EconPapers.repec.org/RePEc:azt:cemmap:18/25

DOI: 10.47004/wp.cem.2025.1825

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