An Alternative Approach to Search Frictions

23 Pages Posted: 31 Oct 2000

See all articles by Ricardo Lagos

Ricardo Lagos

New York University (NYU) - Department of Economics


This paper illustrates an alternative approach to modeling search frictions. Frictions are not assumed to exist, but are shown to arise endogenously as a distinctive feature of the set of equilibria that correspond to a particular range of parameter values. The model's spatial structure and the agents' moving decisions are explicitly spelled out, allowing the number of contacts that occur to depend on the way agents choose to locate themselves. An aggregate matching function is shown to exist, and its behavior with respect to changes in parameters such as distances between locations, the agents' payoffs, and the sizes of the population of searchers on each side of the market is completely characterized.

Suggested Citation

Lagos, Ricardo, An Alternative Approach to Search Frictions. Journal of Political Economy, Vol. 108, No. 5, October 2000 . Available at SSRN: or

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