Empirical Search Models

An Empirical Stationary Equilibrium Search Model of the Housing Market*

“…Equation (12) implies that the optimal  *  and   *  must be such that, the buyer's expected benefit from visiting a property equals her visiting cost.…”

“…As in Horowitz (1992), and Chen and Rosenthal (1996a and 1996b), we assume that the posting price constitutes a price ceiling and a commitment device; that is, if a potential buyer wants to buy the product at the posting price, the seller is obligated to engage in trade. 12 If a sale is made, sellers pay a fixed cost  (fixed costs paid by the seller) and a percentage of the transaction price  (real estate agent's commission rate). Both  and  are exogenous.…”

“…While this may seem like a strong implication, this approach is common in models with stochastic matching where the potential transaction surplus realized when a buyer and a seller meet is pair-specific and random (see, for example, Pissarides 2000). 12 It is worth acknowledging, however, that houses do sometimes sell above the posting price. In certain cases, sellers are surprised by high demand and in others, sellers deliberately set low asking prices to foster competition among buyers.…”

A directed tour of search‐theoretic explanations for unemployment

“…Empirical work using these models, while still at an early stage, also appears to be producing promising results (Canals and Stern (2001)). However, two fundamental problems beleaguer this approach.…”

Structural Models: Inception and Frontier

“…The job search literature has been perhaps one of the most successful at implementing the structural approach in labor economics. Several specialized surveys by Eckstein and Wolpin (1990), Devine and Kiefer (1991), Wolpin (1995), Canals and Stern (2002), Postel Vinay and Robin (2006) As it may have become apparent, in any dynamic model, regardless of its details, we will have to consider the discount factor δ. The identification of the discount factor δ is often challenging so it is common in applications to fix it to a conventional value depending on the time unit of the model.…”