Beauty is a Beast, Frog is a Prince: Assortative Matching with Nontransferabilities
38 Pages Posted: 26 Mar 2012
Date Written: December 25, 2006
We present sufficient conditions for monotone matching in environments where utility is not fully transferable between partners. These conditions involve not only complementarity in types of the total payoff to a match, as in the transferable utility case, but also monotonicity in type of the degree of transferability between partners. We apply our conditions to study some models of risk sharing and incentive problems, deriving new results for predicted matching patterns in those contexts.
Keywords: Assortative matching, nontransferable utility, risk sharing, intrahouse-hold allocation, principal-agent
JEL Classification: C78, D13, J41
Suggested Citation: Suggested Citation