Efficient Dynamic Matching with Costly Search

Alp Atakan

Koç University-TUSIAD Economic Research Forum Working Papers from Koc University-TUSIAD Economic Research Forum

Abstract: This paper considers a frictional market where buyers and sellers, with unit demand and supply, search for trading opportunities. The analysis focuses on explicit search frictions, allows for two-sided incomplete information, and puts no restriction on agent heterogeneity. In this context, a non-trivial, full trade search equilibrium is shown to exist, equilibria are characterized as the values that satisfy the first order conditions for a non-linear planner’s (optimization) problem, and necessary and sufficient conditions are provided for the existence of efficient search equilibria under complete information. These results fully generalize to the two-sided incomplete information setting, under an additive separability condition.

Keywords: Conditional; CAPM (search for similar items in EconPapers)
Pages: 40 pages
Date: 2010-10
New Economics Papers: this item is included in nep-cta
References: View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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