Abstract

https://ssrn.com/abstract=2510732
 


 



Matching in Closed-Form: Equilibrium, Identification, and Comparative Statics


Raicho Bojilov


Ecole Polytechnique, Paris - Department of Economic Sciences; National Institute of Statistics and Economic Studies (INSEE) - Laboratory of Microeconometrics

Alfred Galichon


NYU, Department of Economics and Courant Institute

October 7, 2015


Abstract:     
This paper provides closed-form formulas for a multidimensional two-sided matching problem with transferable utility and heterogeneity in tastes. When the matching surplus is quadratic, the marginal distributions of the characteristics are normal, and when the heterogeneity in tastes is of the continuous logit type, as in Choo and Siow (2006), we show that the optimal matching distribution is also jointly normal and can be computed in closed form from the model primitives. Conversely, the quadratic surplus function can be identified from the optimal matching distribution, also in closed-form. The analytical formulas make it computationally easy to solve problems with even a very large number of matches and allow for quantitative predictions about the evolution of the solution as the technology and the characteristics of the matching populations change.

Number of Pages in PDF File: 30

Keywords: matching, marriage, assignment

JEL Classification: C78, D61, C13


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Date posted: October 16, 2014 ; Last revised: April 12, 2016

Suggested Citation

Bojilov, Raicho and Galichon, Alfred, Matching in Closed-Form: Equilibrium, Identification, and Comparative Statics (October 7, 2015). Available at SSRN: https://ssrn.com/abstract=2510732 or http://dx.doi.org/10.2139/ssrn.2510732

Contact Information

Raicho Bojilov
Ecole Polytechnique, Paris - Department of Economic Sciences ( email )
Ecole Polytechnique
Department of Economics
Paris, 75005
France
HOME PAGE: http://www.economie.polytechnique.edu/jsp/accueil.jsp?CODE=63901904&LANGUE=1
National Institute of Statistics and Economic Studies (INSEE) - Laboratory of Microeconometrics ( email )
15, Boulevard Gabriel Peri
F-92245 Malakoff Cedex
France
Alfred Galichon (Contact Author)
NYU, Department of Economics and Courant Institute ( email )
269 Mercer Street, 7th Floor
New York, NY 10011
United States
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