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STICERD Economic Theory Seminars

Efficient Investment and Search in Matching Markets

Michael Richter (Royal Holloway), joint with Alp Atakan and Matan Tsur

Thursday 07 October 2021 15:30 - 17:00

This event is both online and in person

This event will take place online.

Many of our seminars and public events this year will continue as online seminars or as online and in person. Please check our website listings and Twitter feed @STICERD_LSE for updates.

Unless otherwise specified, current restrictions mean in-person seminars are only open to members of the LSE community (those with a valid LSE ID card).

Those unable to join the seminars in-person are welcome to participate via zoom.


About this event

We study a two-sided search-and-matching model in which agents invest before entry. In every period, agents incur an additive search cost, pairs meet at random and bargain over prices. Inefficiencies can be caused by a potential hold-up problem and mismatches between skills. We make three major points. First, despite the potential inefficiencies, a second welfare theorem holds: the constrained efficient allocation is an equilibrium. Second, we establish a general assortativity result, provide conditions for uniqueness, and characterize the outcomes in symmetric two-skill economies. Third, we show that the efficient outcome can be discriminatory in the marriage market.

Economic Theory Seminars are held on Thursdays in term time at 15:30-17:00, ONLINE or ONLINE AND IN PERSON at the same time.

Seminar organisers: Dr Andrew Ellis and Dr Francesco Nava.

For further information please contact Annie-Rose Nicholas by email: a.nicholas1@lse.ac.uk.

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This event will take place online.