The Comparative Statics of Sorting

Axel Anderson and Lones Smith

Working Papers from Georgetown University, Department of Economics

Abstract: We create a general and tractable theory of increasing sorting in pairwise matching models with transferable utility — one that subsumes Becker (1973) as the extreme cases with most and least sorting. We first prove that the positive quadrant dependence order smartly measures increasing sorting, e.g. it rises in the correlation of matched partners. Our theory centers on synergy — the cross partial difference or derivative of match production. Notably, if synergy everywhere increases, sorting need not rise, but cannot fall. To rescue increasing sorting, we posit often met cross-sectional restrictions on match synergy. Our theory illuminates top economics sorting papers, affording quick proofs of their results and new insights. Synergy reflects basic economic forces, such as diminishing returns, moral hazard, insurance, and learning dynamics. Our proof develops and exploits new monotone comparative statics methods. The main proof proceeds by induction with finitely many types, and secures the continum type results by taking limits. Classification- C6, D2, D5, J1

Keywords: Sorting; comparative statics; matching; complementarity; single crossing aggregation; monotone methods (search for similar items in EconPapers)
Pages: 41
Date: 2021-03-16
New Economics Papers: this item is included in nep-mic and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://axelanderson.georgetown.domains/ComparativeStaticsofSorting.pdf Full text (application/pdf)
None

Related works:
Journal Article: The Comparative Statics of Sorting (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:geo:guwopa:gueconwpa~21-21-06

Ordering information: This working paper can be ordered from
Roger Lagunoff Professor of Economics Georgetown University Department of Economics Washington, DC 20057-1036
http://econ.georgetown.edu/

Access Statistics for this paper

More papers in Working Papers from Georgetown University, Department of Economics Georgetown University Department of Economics Washington, DC 20057-1036.
Bibliographic data for series maintained by Marcia Suss ( this e-mail address is bad, please contact ).