Sorting through search and matching models in economics

Chade, Hector; Eeckhout, Jan; Smith, Lones

doi:http://dx.doi.org/10.1257/jel.20150777

Sorting through search and matching models in economics

Citation

Chade H, Eeckhout J, Smith L. Sorting through search and matching models in economics. Journal of Economic Literature. 2017 Jun;55(2):493-544. DOI: 10.1257/jel.20150777

Abstract

Toward understanding assortative matching, this is a self-contained introduction to research on search and matching. We first explore the nontransferable and perfectly transferable utility matching paradigms, and then a unifying imperfectly transferable utility matching model. Motivated by some unrealistic predictions of frictionless matching, we flesh out the foundational economics of search theory. We then revisit the original matching paradigms with search frictions. We finally allow informational frictions that often arise, such as in college-student sorting.