Econ theoretical literature suggests that competitive search equilibrium can arise efficiency allocation by internalizing the congestion externalities. A typical example is that the Hosios condition is automatically achieved under directed job search and the overinvestment in vacancies is prevented (though there are several different interpretations on where the potential submarkets come from). Another simple textbook example can be that if we have a tragedy of the commons like a fishing pond, we can cut the pond into pieces and let competing agents own those subponds and charge entry free on fishing. As long as there is free entry, the agents profit maximization will internalize the congestion externality.

My question is that do we have any empirical evidences in the literature that show the idea of competitive search equilibrium really works in the real world?



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