Publication Type
Journal Article
Version
publishedVersion
Publication Date
8-2007
Abstract
This paper endogenizes the market structure of an economy with heterogeneous agents who want to form bilateral matches in the presence of search frictions and when utility is nontransferable. There exist infinitely many marketplaces, and each agent chooses which marketplace to be in: agents get to choose not only whom to match with but also whom they meet with. Perfect segmentation is obtained in equilibrium, where agents match with the first person they meet. All equilibria have the same matching pattern. Although perfect assortative matching is not obtained in equilibrium, the degree of assortativeness is greater than in standard models.
Keywords
Financial market structures, Intelligent agents, Economic agents, Market equilibrium, Market economies, Reasoning, Increasing returns, Intuition, Zero
Discipline
Finance | Industrial Organization | Political Economy
Research Areas
Macroeconomics
Publication
Journal of Political Economy
Volume
115
Issue
4
First Page
639
Last Page
664
ISSN
0022-3808
Identifier
10.1086/521967
Publisher
University of Chicago Press
Citation
JACQUET, Nicolas L. and TAN, Serene.
On the Segmentation of Markets. (2007). Journal of Political Economy. 115, (4), 639-664.
Available at: https://ink.library.smu.edu.sg/soe_research/80
Copyright Owner and License
Publisher
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1086/521967