American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Searching Forever After
American Economic Journal: Microeconomics
vol. 14,
no. 3, August 2022
(pp. 558–90)
Abstract
We study a model of two-sided search in which agents' strategic reasoning is coarse. In equilibrium, the most desirable agents behave as if they were fully rational, while for all other agents, coarse reasoning results in overoptimism with regard to their prospects in the market. Consequently, they search longer than is optimal. Moreover, agents with intermediate match values may search indefinitely while all other agents eventually marry. We show that the share of eternal singles converges monotonically to one as search frictions vanish. Thus, improvements in search technology may backfire and even lead to market failure.Citation
Antler, Yair, and Benjamin Bachi. 2022. "Searching Forever After." American Economic Journal: Microeconomics, 14 (3): 558–90. DOI: 10.1257/mic.20200020Additional Materials
JEL Classification
- C78 Bargaining Theory; Matching Theory
- D11 Consumer Economics: Theory
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- J12 Marriage; Marital Dissolution; Family Structure; Domestic Abuse
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