Partnership Dissolution in a Search Market With On-The-Match Learning

Finn Schmieter ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We construct a frictional search-and-matching model with on-the-match learning and rematching. Agents are ex-ante homogeneous, have idiosyncratic preferences, and receive news about the profitability of their current match following a Poisson process. We provide an infinite number of pointwise balance conditions and a finite number of aggregate balance conditions and prove their equivalence. We show that agents follow cutoff strategies in the unique steady-state equilibrium. If the profitability types inside a match have a strong positive (negative) correlation, then a faster learning rate is ex-ante welfare-increasing (decreasing) for the agents.

Keywords: Search frictions; matching; on-the-job search; learning (search for similar items in EconPapers)
JEL-codes: C78 D83 J64 (search for similar items in EconPapers)
Pages: 30
Date: 2022-01
New Economics Papers: this item is included in nep-dge, nep-lab and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2022_327

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