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5 votes

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

The authors apply in the second step the exact same rules they used in the first step, regarding the calculation of the total differential of an integral, taking also into account that the integral is ...
Alecos Papadopoulos's user avatar
4 votes
Accepted

elasticity of labor supply

We have that: $$ L(s,H) = \frac{f(\theta)}{s + f(\theta)}H. $$ Take the derivative with respect to $\theta$: $$ \frac{\partial L}{\partial \theta} = \frac{f'(\theta)}{s + f(\theta)}H - \frac{f(\theta)}...
tdm's user avatar
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3 votes
Accepted

Question regarding preferences in Gale and Shapley (1962)

Gale and Shapley barely make any assumptions about preferences. They don't need a functional form, simply an ordinal ranking of the options. Moreover, there are no transfers in this setting, only the ...
Bayesian's user avatar
  • 5,291
3 votes

Directed search with privately informed buyers and capacities

I am aware of classic models such as Kreps & Scheinkman (1983). I am also aware of Burdett, Shi & Wright (2001), but note that their buyers are ex-post symmetric as both of them have value $...
Bayesian's user avatar
  • 5,291
2 votes
Accepted

What exactly is an exogenous stationary distribution?

Here is explanation for the terms: Exogenous - determined outside the system/model being studied. For example, if you study macroeconomic model without explicitly modelling weather patterns, bad ...
1muflon1's user avatar
  • 57.2k
2 votes
Accepted

Why is matching function increasing in arguments?

Think about it this way. The function is measuring the number of new matches being created. If we increase either the vacancies or the amount of unemployed, the function will generate more matches. ...
Lee Sin's user avatar
  • 661
2 votes

McCall Search Model: Present value of lifetime income

In the version of the McCall search model I'm familiar with, once you accept an offer of wage $w$, you receive that wage $w$ in every period starting from the period of acceptance. Hence, from the ...
Theoretical Economist's user avatar
2 votes

Modeling job application process in labor market

Chapters 6-8 (especially 8) in Modern Labor Economics: Theory and Public Policy, a textbook by Ehrenberg and Smith, cover the topics concerning labor supply. I guess the parts in Ch. 8 that discuss ...
Herr K.'s user avatar
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2 votes

Differentiation of the value function in Burdett Mortensen (1998)

When you take the integral of a $\max_{\{\cdot\}}$ operator, I think you have to split the integral into two separate integrals with different supports on them. Even if your value function is ...
Kitsune Cavalry's user avatar
  • 6,648
2 votes
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What are the general charateristics of matching markets that make then different from regular markets?

The deviance from a "normal" market boils down to how that market clears. Matching markets are markets in which prices alone don't clear the market, as thought in mainstream economic theory, and so ...
JellisHeRo's user avatar
2 votes

What is the implication of perfectly reversible capital?

I think I get the answer but I am not 100% sure. Any comment would be welcome. I realized that this is related to the search-matching nature of the model (comparing to competitive labor market), so ...
Alalalalaki's user avatar
  • 2,496
2 votes

Search and Matching model with 2 agents?

I am not sure if this is exactly what you are looking for, but this paper has model that sounds like what you want: Shimer, Robert, 2006. “On-the-job search and strategic bargaining, ”European ...
csilvia's user avatar
  • 2,734
1 vote
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Abraham (1987) Simple Job Market Matching Model

Note that function $p$ actually depends upon a single variable $u/v$ and I prefer avoiding the abuse of notation (source of confusion) and write $p(u/v) = P(u,v)$. This implies: \begin{equation} p'(...
Bertrand's user avatar
  • 3,371
1 vote

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

Search and matching models are fairly standard in macroeconomics. I guess this is fair to say since Peter Diamond, Dale Mortensen, and Christopher Pissarides won the Nobel prize in 2010. These are the ...
Bayesian's user avatar
  • 5,291
1 vote
Accepted

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

It depends on what you define as wage curve. I did not check in the textbooks, but you suggest that Pissarides and Cahuc et al. do not use the same mathemaical expression for the "wage curve". 1) In ...
GuiWil's user avatar
  • 887
1 vote

Stable marriage problem with transferable utilities

There's two implementations that should somewhat cover your needs, matchingR which does reduced-form algorithmic matching and ...
Pedro Cavalcante's user avatar
1 vote

DMP Search Model - Terminology

A vacant job is an asset if we consider that the firm can match with a worker and get a positive expected profit. Firms post vacancies up to a point where $V=0$. If $V$ were positive, more firms would ...
emeryville's user avatar
  • 6,990
1 vote

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

$q(\theta)$ is defined as the job-filling rate. Note that market tightness $\theta$ is not necessarily constant over time (Pissarides makes a dynamic analysis at some point). It may help to denote it $...
GuiWil's user avatar
  • 887
1 vote

Why is matching function increasing in arguments?

Let's refresh the definition of a partial derivative. partial derivative of a function of several variables is its derivative with respect to one of those variables, with the others held ...
snoram's user avatar
  • 1,007
1 vote

Price when both supply and demand have market power

I suppose one way to solve this - but I'm still looking for a proper way without - is to fall back to matching. If there is matching between the intermediate and the final stage, at zero search cost ...
FooBar's user avatar
  • 10.7k
1 vote

Matching Theory: Search Time

The paper is a couple of years old by now, but I believe the first people to look seriously at the issues you're thinking of are Akbarpour, et al. It might be useful to look at that paper and the ...
Theoretical Economist's user avatar

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