International Economic Review · 1998 · 255 citations · 12 references
In equilibrium, unmatched traders on one side of a marketplace continuously seek to match with the flow of new traders on the other side. The study models equilibrium trading patterns in marketplaces with differentiated goods. Buyers first sample a stock of goods, purchase and exit if matched, otherwise they wait for new arrivals and reject the initial stock. The model captures the matching dynamics between unemployed job seekers and vacancies in UK Job Centres.
This paper models equilibrium trading patterns when marketplaces exist and goods are differentiated. When first visiting the market, a buyer samples a stock of goods. If fortunate, the buyer matches with and purchases one of these goods and then exits the market. If an initial match does not exist, the buyer can now only match with the flow of new goods for sale. The previous stock has been sampled and rejected. In a steady state, the current stock of unmatched traders on one side of the market is trying to match with the flow of new traders on the other side. It is shown that this market behaviour describes matching patterns between unemployed job seekers and vacancies in UK Job Centres.
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