Assortive Matching and Search

Robert Shimer and Lones Smith

Working Papers from Michigan - Center for Research on Economic & Social Theory

Abstract: This paper reexamines a classic insight of the assignment literature - when match- ing is assortative - in an environment with search frictions. We assume a continuum of heterogeneous agents who can produce only in pairs . If two agents form a match, they generate a ow of divisible output. We depart from the neoclassical assignment literature (e.g. Becker 1973) in assuming that match creation is time consuming: each unmatched agent faces a Poisson arrival of potential mates (Diamond 1982, Mortensen 1982, Pissarides 1990). As matching precludes further search, agents must weigh the opportunity cost of ceasing to search for better op- tions, against the benet of producing immediately.

Keywords: MATCHING (search for similar items in EconPapers)
JEL-codes: C70 C78 (search for similar items in EconPapers)
Pages: 29 pages
Date: 1998
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Assortative Matching and Search (2000)
Working Paper: Assortative Matching and Search (1997)
Working Paper: Assortative Matching and Search (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:michet:98-09

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