Abstract
This paper extends the two-sided matching literature with heterogeneous agents by considering endogenous separation behaviour by agents. When two agents divorce and return to the matching market, that separation decision affects the composition of singles in the market. By changing the average quality of singles in that market, they change the value of being unmatched. This externality effect is sufficiently strong and can support equilibrium separation cycles, even with constant returns to matching.
Original language | English (US) |
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Pages (from-to) | 1069-1090 |
Number of pages | 22 |
Journal | Journal of Economic Dynamics and Control |
Volume | 22 |
Issue number | 7 |
DOIs | |
State | Published - May 25 1998 |
Keywords
- C78
- Cycles
- E32
- Heterogeneity
- Matching
- Separations
ASJC Scopus subject areas
- Economics and Econometrics
- Control and Optimization
- Applied Mathematics