Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/91579 
Year of Publication: 
2013
Series/Report no.: 
SFB 649 Discussion Paper No. 2013-044
Publisher: 
Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk, Berlin
Abstract: 
When agents do not know where to find a match, they search. However, agents could direct their search to agents who strategically choose a certain signal. Introducing cheap talk to a model of sequential search with bargaining, we find that signals will be truthful if there are mild complementarities in match production: supermodularity of the match production function is a necessary and sufficient condition. It simultaneously ensures perfect positive assortative matching, so that single-crossing property and sorting condition coincide. As the information from signals allows agents to avoid all unnecessary search, this search model exhibits nearly unconstrained efficiency.
Subjects: 
assortative matching
sorting
search
signals
information
JEL: 
J64
D83
C78
Document Type: 
Working Paper

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