Questions tagged [search-and-matching]

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9
votes
1answer
219 views

Matching Theory: Search Time

Consider the standard Diamonds coconut economy. One could imagine that people who search longer, have a different likelihood of matching someone to trade with. Has there been something done akin this ...
8
votes
2answers
215 views

Differentiation of the value function in Burdett Mortensen (1998)

I'm currently making my way through Burdett and Mortensen's classic paper of on the job search. What should be an easy task of finding an expression for the reservation wage is made slightly more ...
6
votes
2answers
59 views

Proof that the diff-in-diff (wrt sample size) of the expectation of a first-order statistic is positive (Stigler 1961)

I'm trying to prove a claim made in Stigler (1961), "The Economics of Information." This claim has to do with showing that the marginal benefit of making an additional search (e.g., searching an ...
5
votes
1answer
427 views

How do you determine the strict core in a matching game?

So I have a game in which home owners prefer certain other's homes. The owners are A, B, C, and D with a, b, c, and d referring to their respective homes. They each prefer homes according to the ...
5
votes
1answer
42 views

Stable marriage problem with transferable utilities

I'm looking for a package or a code (preferably in R) that finds the solution to the stable marriage problem with transferable utilities (Shapley and Shubik 1971). Specifically, I'm looking for one or ...
4
votes
1answer
131 views

Showing that the elasticity of arrival rate for workers wrt $\theta$ is between $0$ and $1$

Let $L=E+U$ where $L$ is labour force, $E$ is number of employed, and $U$ is unemployed people. Let $u = \frac{U}{L}$ and $v = \frac{V}{L}$. Given $m(u,v)$ as a matching function that determines ...
4
votes
1answer
94 views

Search and matching model: effect of hiring cost on wage curve

What effect does the hiring cost have on the wage bargaining outcome (wage curve)? In Cahuc, Carcillo, and Zylberberg: Labor Economics, they derive the following wage curve: $$w = z + (y-z) \frac{\...
4
votes
2answers
97 views

A confusion regarding search and matching model in Pissarides's "Equilibrium Unemployment Theory" book

I was studying chapter 1 of the book "Equilibrium Unemployment Theory" and I got confused about the way Pissarides has defined the probability of a firm not finding a worker in a short time interval $...
3
votes
1answer
36 views

What is the implication of perfectly reversible capital?

I am reading the lecture note in labor economics by Acemoglu and Autor. In the chapter of basic search model, they assume capital is perfectly reversible, and argue that "Perfect reversibility ...
3
votes
1answer
83 views

Matching in Blanchard-Diamond (1994)

Setup Blanchard-Diamond (1994) have a model where each unemployed has a single ball (application) that she tosses into urns (vacancies). With probability $a$ the application lands in the urn - the ...
3
votes
1answer
103 views

Amplification Effects: Negative Denominator

Let $0 < \rho < 1$ be the discount rate, $V$ some option value, and $F$ some fundamental. $$ \rho V = \beta V + F$$ You have access to some option value $V$ that will always deliver you some ...
3
votes
1answer
70 views

Is there an algorithm to find as many NE as possible in this generalized second price auction?

Suppose three advertisers, I, II, III are participating in an auction for three positions for online advertising, top, middle and bottom. Assume that click per second for a position is not affected ...
3
votes
0answers
28 views

Calibration of labor market frictions parameters

I want to refer to the following paper A Three State Model of Worker Flows. My questions are regarding the calibration of parameters. First, I would appreciate any help when on p. 11 it says that $\...
3
votes
0answers
157 views

Job-finding rate in an urn-ball model with types

Setup Say you have two types of workers, high and low. The share of low-types among the unemployed population is $P$. I want to find the job-finding rate for these types. Matching Matching is ...
2
votes
1answer
58 views

Directed search with privately informed buyers and capacities

My question seems to be a basic one and there should be a rather well-known reference in the (IO or labor) search literature. I will upvote (and comment on) any relevant answer and I will accept an ...
2
votes
1answer
57 views

Burdett and Mortensen (1998), Equation (22), Integral by parts question

Suppose $F(x)$ and $H(x)$ are both cumulative prob dist functions on the support of $[b_0,b_1]$ and we know followings: $$u(x|F)=\int_{b_0}^{x}\frac{m}{1+k[1-F(b)]} dH(b)$$ and from this $$[1+k(1-...
2
votes
1answer
52 views

Modeling job application process in labor market

I need to model the job application process by job seekers. Specifically a job seeker when looking for a job, comes across a job and then decides whether to apply for it or not. I want to model this ...
2
votes
1answer
54 views

Abraham (1987) Simple Job Market Matching Model

I have a question about a derivation in Abraham (1987)'s simple job market matching model (equations 3 through 7): She begins by writing down tautologies: J - V = L - U = E where J is the number of ...
2
votes
1answer
74 views

Price when both supply and demand have market power

I have an intermediate sector that operates using labor only. There is 1-1 pairs between firms and workers, with profits $$\pi = (Ap - w)\cdot 1$$ $p$ is the price, $A$ productivity, $w$ wage. ...
2
votes
0answers
25 views

Why does the following approximation hold?

In Essential Mathematics for Economic Analysis, on page 426 there is a model on gains from search where profit function is given as: $$\pi (t) = [p^0 -p(t)]x^0 -wt$$ $t$ is time, $p$ price, $x$ ...
2
votes
0answers
80 views

Is it better to actively or passively offer to sell rare items at high prices?

In a massively multiplayer online video game, I have had the experience of attempting to sell a rare item on the game's forum, bumping the thread for a while before giving up for many months, and then ...
2
votes
0answers
52 views

Welfare function in General Capital model (Search and Matching)?

i'm working on a model from the Mortensen textbook: "Wage dispersion why are similar workers paid differently?". To be precise, i'm working on the model about general capital. In this case, capital is ...
1
vote
1answer
55 views

Search and Matching model with 2 agents?

I would like to know if you know any model with Search and matching framework (Mortenses-Pisarides style) with 2 types of workers (like Ricardian and rule of thumb consumers for exemple) ? I would ...
1
vote
1answer
51 views

DMP Search Model - Terminology

In the most basic Diamond-Mortensen-Pissarides (DMP) model we have the variable $V$ which represents the present discounted value of expected profits from a vacant job. The corresponding Bellman ...
1
vote
1answer
100 views

Equilibrium value of $b$ (market tightness) in a search model

Consider the following one-shot version of a labour market matching model. Let the labour force be normalized at 1, who, because there is only one period, all start out as unemployed. There is a very ...
1
vote
0answers
23 views

Why must the wage barganing be derived at steady-state?

In wage bargaining theory, in the context of matching theory, firms and workers can negotiate a Nash equilibrium by maximizing a function of firms' and workers' surplus - with the purpose of allowing ...
0
votes
1answer
27 views

Question regarding preferences in Gale and Shapley (1962)

Is it correct to say that preferences in the classic Gale and Shapley College Admissions problem are quasi-linear? Or is this something thats introduced later in the literature, vis a vis Shapley and ...
0
votes
2answers
96 views

Why is matching function increasing in arguments?

In matching theory, the matching function $m_t=m(u_t,v_t)$, where $m_t$ is the number of matches(new hires) between unemployed looking for work($u_t$) and vacancies($v_t$). This matching function is ...
0
votes
1answer
133 views

McCall Search Model: Present value of lifetime income

In the Bellman for the search model, how is the present discounted value of future income equal to $\frac{w}{1-\beta}$? Sounds like a basic question but I just can't comprehend the math in my head, ...
0
votes
1answer
30 views

Search model with firm decision

I am wondering if there is any work in search models that discusses firm behaviors. Most common search models that I am familiar with talk about the job seeker's threshold rule. Is there any model ...
0
votes
1answer
28 views

Has there been an applications of search and matching theory in the Neoclassical Growth Model?

Specifically, I am looking for the standard neoclassical growth model, but the labour decision is based on either search or matching theory instead of a Walrasian labour mechanism.
0
votes
1answer
43 views

What are the general charateristics of matching markets that make then different from regular markets?

I would like to know what exactly makes matching markets different from regular markets. If you could illustrate with examples to help me understand better, that would be nice. Thanks in advance.
0
votes
0answers
11 views

How is matching theory used in context of Marriage market difference in terms of which is used in context of labour and housing market?

I am looking for an overview as most of the introduction to matching talks about the work done in the Marriage market, Job Matching which is axiomatic. Then while looking at Labour and housing market ...
0
votes
1answer
21 views

Constant Returns to Scale and Positive Marginal Products

In a simplified model in the search theory of unemployment, let $M=\mu{m(u,v)}$ be the matching function where $u$ and $v$ is unemployment and vacancies respectively. Given $m(u,v)$ has constant ...