Integrating Collective Codels and the Marriage Market: An Illustration

Abstract

In this paper, I show how the ITU framework developed recently by Galichon, Kominers and Weber (2016) can be used to integrate collective models to the marriage market. I set up a simple model with Cobb-Douglas utility functions, and show how it can be embedded in their matching framework. I show how important concepts such as the Pareto weights or the sharing rule are connected to this setting. Finally, I provide several numerical examples as well as comparative statics exercises to illustrate the properties of the model.

Keywords: Matching, Collective Models, ITU, Cobb Douglas, Marriage