Two-Sided Search with Nontransferable Utility

We analyze a two-sided search model in which we assume utility is not perfectly transferable. Except for this assumption the model is standard, yet it generates results that are quite different from those obtained in models with transferable utility. In particular, the model has multiple equilibria,...

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Bibliographic Details
Published inReview of economic dynamics Vol. 1; no. 1; pp. 220 - 245
Main Authors Burdett, Kenneth, Wright, Randall
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.01.1998
Subjects
matching
search
unemployment
unemployment
search
matching
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Summary:We analyze a two-sided search model in which we assume utility is not perfectly transferable. Except for this assumption the model is standard, yet it generates results that are quite different from those obtained in models with transferable utility. In particular, the model has multiple equilibria, even with constant returns to scale in the meeting technology. We also provide conditions to guarantee uniqueness in equilibrium search models with or without transferable utility. These conditions apply even with increasing returns in the meeting technology. Examples and applications are discussed.Journal of Economic LiteratureClassification Numbers: C78, D83.
ISSN:1094-2025
1096-6099
DOI:10.1006/redy.1997.0004