SFB 303 Discussion Paper No. B - 462
Author: Herreiner, Dorothea K.
Title: The Decision to Seek or to Be Sought
Abstract: A one-shot market with two sides is considered where everybody
can be matched with at most one person. Individuals have to find
trading partners on their own. Whether searching or waiting is an
optimal strategy is the central question of this paper. In a market
where searching and waiting are done exclusively by one market side,
it is more efficient if the long market side searches. In a market
where on both sides some individuals search and others stay put, there
are also mixed equilibria which are even more efficient. The matching
friction due to uncoordinated search by individuals implies that
larger markets are in general less efficient than a collection of
smaller markets.
Keywords: Matching, Search, Decentralized Markets
JEL-Classification-Number: C78, D40, J64
Creation-Date: December 1999
URL:
../1999/b/bonnsfb462.pdf
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