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• Conference on economic decisions related to search and matching »

My Fall 2010 conference in Aarhus.

• Course: The Economics of Search and Matching »

Materials for my upcoming fall course at Aarhus are under development here.

Marriage, Fertility and Step-Families: An Equilibrium Analysis

This website is dedicated to the understanding of economic decisions related to search and matching.

Search and matching problems are central to many economic questions regarding markets and social interactions. These questions range from figuring out the reasons for wage inequality to understanding why money is valued. Search and matching problems also introduce important trade-offs at the individual level -- for example a woman might face a choice between a marriage with a less than ideal partner, in order to share the burden of early child rearing, or to wait for a better match with the associated costs of delaying her fertility. The decision to accumulate and develop firm specific human capital is a related (and much more market oriented) example.

Search and matching problems are also linked to the gradual transmission of information -- both good and bad - and thus the use of explicit market mechanisms such as money, third party reputation systems and informal mechanisms such as social networks and memory. The emergence of criminal activities and other anti-social behavior can be traced to societies that do not fully solve such problems. Trust, reputation and memory are all parts of the social capital related to these concerns. Changes in policies that govern social interaction such as the size of communities and openness towards immigrants are just some of the examples of how societies respond.

The economic importance of search and matching frictions are also related to the operation of many explicit markets that attempt to mitigate risk. For example, the provision of social insurance can depend on partially observable precautionary measures such as savings, which are in turn related to the stochastic and partially observable employment and risk sharing opportunities presented by employers and marriage partners. Understanding these interactions using equilibrium theories provides a powerful method to study counterfactual experiments such as the introduction of new social policies, education, new market designs and deeper changes in the behavior and priorities of individuals.

This website offers resources to students and researchers who wish to advance the theory of search and matching.

John Kennes

Associate Professor

University of Aarhus

Website under development.