Template-Type: ReDIF-Paper 1.0
Title: Non-Stationary Search and Assortative Matching
Author-Name: Nicolas Bonneton
Author-Email: nicolas.bonneton@gmail.com
Author-Name: Christopher Sandmann
Author-Email: c.sandmann@lse.ac.uk
Classification-JEL: C73, C78, D81, E32
Keywords: non-stationary, assortative matching, random search, risk preferences, NTU


Abstract:  This paper studies assortative matching in a non-stationary search-and-matching model
with non-transferable payoffs. Non-stationarity entails that the number and characteristics of 
agents searching evolve endogenously over time. Assortative matching can fail
in non-stationary environments under conditions for which Morgan (1994) and Smith
(2006) show that it occurs in the steady state. This is due to the risk of worsening match
prospects inherent to non-stationary environments. The main contribution of this paper
is to derive the weakest sufficient conditions on payoffs for which matching is assortative.
In addition to known steady state conditions, more desirable individuals must be less
risk-averse in the sense of Arrow-Pratt.


Note: 
Length: 58
Creation-Date: 2023-09
Revision-Date:
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp465
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2023_465