Pre-match investment with frictions

• 成果类型: Article
• 署名作者: Bidner, Chris
• 署名单位: University of New South Wales Sydney
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2009.06.004
• 发表日期: 2010
• 页码: 23-34
• 关键词: Matching; frictions; Premarital investment; signaling

摘要

The paper explores an environment in which agents are motivated to make unproductive investments with the sole aim of improving their matching opportunities. In contrast to existing work, I add frictions by allowing the investment to be imperfectly observed. The analysis allows for a deeper understanding of the trade-off inherent in related models: investments waste resources but facilitates more efficient matching patterns. I show that greater frictions i) do not always lead to inferior matching patterns, and ii) can force the economy into to a Pareto preferred equilibrium. (C) 2009 Elsevier Inc. All rights reserved.