The Marriage Model with Search Frictions

The Economics of Marriage in North Africa

“…Game theory has often been applied to understanding issues of allocation 2 within households and marriages Pollak 1996, 2003;McElroy 1990;Udry 1996) in sharp contrast to models that treat the household as a single unit, perhaps with a benevolent head (Becker 1974b). These models also extend into the search for a partner in the marriage market (Adachi 2003;Bergstrom and Bagnoli 1993;Smith 2006). An important feature of these models is their focus on the bargaining power of different parties and bargaining behaviours, which can illuminate both processes and outcomes of the marriage market.…”

“…Even more recent are applications of game theory to the economics of marriage (Shelley Lundberg and Pollak, 2003;Shelly Lundberg and Pollak 1996;McElroy 1990;Udry 1996) and search for a partner (Adachi 2003;Bergstrom and Bagnoli 1993;Smith 2006) can help explain both the processes and outcomes of the marriage market.…”

Existence of steady-state equilibria in matching models with search frictions

“…The basic structure of our model is as in Shimer and Smith (2000) or Smith (2006): There is a continuum of infinitely lived agents who are either matched or unmatched at any moment in time. Meetings between unmatched agents are generated by an exogenous search technology.…”

“…Upon meeting, agents play a bargaining game, determining whether or not they become matched and provided they do so, their payoffs within the match. The main concern of the literature studying such models (surveyed in Smith, 2011) is the characterization of matching patterns in steady-state equilibria. Here we focus on the question of existence of steadystate equilibria.…”

“…Shimer and Smith (2000) provide an existence argument applicable both to models with transferable and nontransferable utility (see Smith, 2006), but requiring that-given the agents' decisions which matches to acceptthere is a unique distribution of unmatched agents which maintains a steady state. To obtain this uniqueness property, Shimer and Smith (2000) impose the stringent assumption of a quadratic search technology.…”