Targeted Search in Matching Markets
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Series
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Speaker(s)Paulina Restrepo (Federal Reserve Bank of St. Louis, United States)
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FieldMacroeconomics
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LocationTinbergen Institute Amsterdam, room 1.01
Amsterdam -
Date and time
May 17, 2019
16:00 - 17:15
We propose a parsimonious
matching model where people’s choice of whom to meet endogenizes the degree of
randomness in matching. The analysis highlights the interaction between a
productive motive, driven by the surplus attainable in a match, and a strategic
motive, driven by reciprocity of interest of potential matches. We find that
the interaction between these two motives differs with preferences—vertical
versus horizontal—and that this interaction implies that preferences estimated
using our model can look markedly different from those estimated using a model
where the degree of randomness is not endogenous. We illustrate these results
using data on the U.S. marriage market and finish by showing that the model can
rationalize the finding of aspirational dating.
Joint with Anton Cheremukhin and
Antonella Tutino.