The law of attraction bilateral search and horizontal heterogeneity

Arbeitspapier

We study a matching model with heterogeneous agents, nontransferable utility and search frictions. Agents differ along a horizontal dimension (e.g. taste) and a vertical dimension (e.g. income). Agents' preferences coincide only in the vertical dimension. This approach introduces individual preferences in this literature as seems suitable in applications like labor markets (e.g. regional preferences). We analyze how the notion of assortativeness generalizes to integration or segregation outcomes depending on search frictions. Contrary to results from the purely vertical analysis, here, agents continuously adjust their reservation utility strategies to changing search frictions. The model is easily generalizable in the utility specification, the distribution of taste-related payoffs and the number of vertical types. Extreme utility specifications can be treated as a case of horizontal heterogeneity only.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB 649 Discussion Paper ; No. 2011-017

Classification and Topics

• Classification: Wirtschaft ; Household Production and Intrahousehold Allocation ; Allocative Efficiency; Cost-Benefit Analysis ; Marriage; Marital Dissolution; Family Structure; Domestic Abuse
• Subject: matching ; horizontal differentiation ; marriage markets ; Ehe ; Suchtheorie ; Matching ; Präferenztheorie ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hofmann, Dirk ; Qari, Salmai
• Event: Veröffentlichung
• (who): Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
• (where): Berlin
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/56697
• Last update: 10.03.2025, 11:44 AM CET