Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123436
Year of Publication: 
2012
Series/Report no.: 
WWZ Discussion Paper No. 2012/10
Publisher: 
University of Basel, Center of Business and Economics (WWZ), Basel
Abstract: 
We embed a two-sided matching market with non-transferable utility, a marriage market, into a random search model. We study steadystate equilibria and characterize the limit of the corresponding equilibrium matchings as exogenous search frictions become small. The central question is whether the set of such limit matchings coincides with the set of stable matchings for the underlying marriage market. We show that this is the case if and only if there is a unique stable matching. Otherwise, the set of limit matchings contains the set of all stable deterministic matchings, but also contains unstable random matchings. These unstable random matchings are Pareto dominated. Thus, vanishing frictions do not guarantee the efficiency of decentralized marriage markets.
Subjects: 
Marriage Market
Stable Matchings
Random Matchings
Serarch Frictions
JEL: 
C78
D83
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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