Assortative matching through signals

Friedrich Poeschel ()

SFB 649 Discussion Papers from Humboldt University, Collaborative Research Center 649

Abstract: When agents do not know where to find a match, they search. However, agents could direct their search to agents who strategically choose a certain signal. Introducing cheap talk to a model of sequential search with bargaining, we find that signals will be truthful if there are mild complementarities in match production: supermodularity of the match production function is a necessary and sufficient condition. It simultaneously ensures perfect positive assortative matching, so that single-crossing property and sorting condition coincide. As the information from signals allows agents to avoid all unnecessary search, this search model exhibits nearly unconstrained efficiency.

Keywords: Assortative matching; sorting; search; signals; information (search for similar items in EconPapers)
JEL-codes: C78 D83 J64 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2013-08
New Economics Papers: this item is included in nep-gth and nep-mic
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http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2013-044.pdf (application/pdf)

Related works:
Working Paper: Assortative matching through signals (2013)
Working Paper: Assortative matching through signals (2012)
Working Paper: Assortative matching through signals (2012)
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