The Marriage Model with Search Frictions

24 Pages Posted: 27 Jun 1997

See all articles by Lones Smith

Lones Smith

University of Wisconsin at Madison - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 27, 1997

Abstract

In his theory of marriage, Becker (1973) showed that assortative matching arises with either (i) supermodular productive interaction and transferable utility, or (ii)monotonic production with nontransferable utility (NTU). In an exploration of the latter NTU matching model, this paper shows how productive interaction again matters if finding partners requirestiming-consuming search. I show that the reason is that one must consider the value of everyone's time. Assume that type x earns f(x; y) when matched with y, with higher types preferred (fy 0). When f(x2; y2 )f(x1; y1 )f(x2; y1 )f(x1; y2 ), all von Neumann-Morgenstern preferences over matches coincide, and perfect segregation, or equivalence classes, arises. This observation then motivates my main proposition that in any search equilibrium and for all atomless type distributions, matching is positively assortative [i.e. the set of types with whom x matches is increasing in x] when f is log-supermodular: f(x2; y2 )f(x1; y1 )f(x2; y1 )f(x1; y2 ) for x2 x1; y2 y1.

JEL Classification: D83

Suggested Citation

Smith, Lones, The Marriage Model with Search Frictions (February 27, 1997). Available at SSRN: https://ssrn.com/abstract=34242 or http://dx.doi.org/10.2139/ssrn.34242

Lones Smith (Contact Author)

University of Wisconsin at Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706-1393
United States
608-263-3871 (Phone)
608-262-2033 (Fax)

HOME PAGE: http://www.lonessmith.com

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
293
Abstract Views
2,039
rank
128,097
PlumX Metrics