Two‐Sided Search, Marriages, and Matchmakers

Francis Bloch, Harl E. Ryder

International Economic Review · 2000 · 158 citations · 0 references

Concepts

TL;DR

Utility in the model equals the index of an agent’s mate. The article analyzes the provision of matching services in a two‑sided search model. Agents are drawn from two heterogeneous populations on [0,1], form subintervals in equilibrium, and are matched only within their class, with marriage brokers using a centralized procedure. When the matchmaker charges a uniform participation fee, only higher‑quality agents participate in the centralized procedure, whereas a commission on matching surplus attracts only lower‑quality agents.

Abstract

This article analyzes the provision of matching services in a model of two‐sided search. Agents belong to two heterogeneous populations and are distributed on [0, 1]. Their utility is equal to the index of their mate. In a search equilibrium agents form subintervals and are only matched to agents inside their class. Marriage brokers match agents according to a centralized procedure. If the matchmaker charges a uniform participation fee, only agents of higher quality participate in the centralized procedure. If the matchmaker charges a commission on the matching surplus, only agents of lower quality go to the intermediary.