Price formation in a matching market with targeted offers

B-Tier
Journal: Games and Economic Behavior
Year: 2014
Volume: 87
Issue: C
Pages: 161-177

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We model a market where the surpluses from seller–buyer matches are heterogeneous but common knowledge. Price setting is synchronous with search: buyers simultaneously make one personalized offer each to the seller of their choice. With impatient players efficient coordination is not possible, and both temporary and permanent mismatches occur. Nonetheless, for patient players efficient matching (with monopsony wages) is an equilibrium. The setting is inspired by a labor market for highly skilled workers, such as the academic job market, but it can be easily adapted to, for example, the housing market or Internet advertising auctions.

Technical Details

RePEc Handle
repec:eee:gamebe:v:87:y:2014:i:c:p:161-177
Journal Field
Theory
Author Count
1
Added to Database
2026-01-29