Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/339430 
Year of Publication: 
25
Series/Report no.: 
cemmap working paper No. CWP18/25
Publisher: 
Centre for Microdata Methods and Practice (cemmap), The Institute for Fiscal Studies (IFS), London
Abstract: 
We introduce a model of dynamic matching with transferable utility, extending the static model of Shapley and Shubik (1971). Forward-looking agents have individual states that evolve with current matches. Each period, a matching market with market-clearing prices takes place. We prove the existence of an equilibrium with time-varying distributions of agent types and show it is the solution to a social planner's problem. We also prove that a stationary equilibrium exists. We introduce econometric shocks to account for unobserved heterogeneity in match formation. We propose two algorithms to compute a stationary equilibrium. We adapt both algorithms for estimation. We estimate a model of accumulation of job-specific human capital using data on Swedish engineers.
Subjects: 
Matching
repeated games
stationary equilibrium
empirical estimation
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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