Nicolas Bonneton

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february, 2019

201920feb12:30 pm1:15 pmNicolas Bonneton"Non-Stationary Search and Assortative Matching"Series:Microeconomic Theory Student Lunch Seminar

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The abstract: “This paper studies sorting of heterogeneous agents in a non-stationary random search matching model with non-transferable payoffs. We derive sufficient conditions on payoffs to establish positive assortative matching across all equilibria. The first condition is log supermodularity in payoffs. Assuming differentiability, the second condition is equivalent to log supermodularity of the payoff’s partial derivative in the matched partner’s type. The latter can be likened to saying that higher ranked types are less risk-averse. This completes the analysis by Smith (2006) who focuses on positive assortative matching at the steady state. We also provide an equilibrium existence proof showing that search equilibria exist for a wide class of entry rates, meeting rates and payoffs.”



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