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Stable Marriages and Search Frictions

Lauermann, Stephan and Nöldeke, George. (2012) Stable Marriages and Search Frictions. WWZ Discussion Papers, 2012 (10).

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Official URL: https://edoc.unibas.ch/61600/

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Abstract

We embed a two-sided matching market with non-transferable utility, a marriage market, into a random search model. We study steadystate equilibria and characterize the limit of the corresponding equilibrium matchings as exogenous search frictions become small. The central question is whether the set of such limit matchings coincides with the set of stable matchings for the underlying marriage market. We show that this is the case if and only if there is a unique stable matching. Otherwise, the set of limit matchings contains the set of all stable deterministic matchings, but also contains unstable random matchings. These unstable random matchings are Pareto dominated. Thus, vanishing frictions do not guarantee the eciency of decentralized marriage markets.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Mikroökonomische Theorie (Nöldeke)
12 Special Collections > WWZ Publications > WWZ Discussion Papers and Working Papers
UniBasel Contributors:Nöldeke, Georg
Item Type:Working Paper
Publisher:WWZ, University of Basel
Number of Pages:35
Note:Publication type according to Uni Basel Research Database: Discussion paper / Internet publication
Language:English
Identification Number:
  • handle: RePEc:bsl:wpaper:2012/10
Last Modified:16 Mar 2018 15:11
Deposited On:08 Mar 2018 13:15

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