The Department of Economics Theory, History, and Development Seminar Series presents

"Positive Assortative Matching and the Nash Bargaining Solution"
with Hao Jia, Lecturer, Deakin University Australia

Monday, January 14, 2013
3:30-5:00 p.m.
Social Science Plaza B, Room 3266 (Econ Library)

This talk analyzes a decentralized search and matching economy with transferable utility composed of heterogeneous agents. It focuses on an economy with explicit additive search costs, as discussed in Atakan (2006), and provides a necessary and sufficient condition for the stationary search equilibrium being a positive assortative matching. In particular, this talk shows that the Nash bargaining solution is the only socially adaptive distributive rule to ensure that complementarities in joint production (supermodularity of the joint production function) always lead to a positive assortative matching outcome.

For further information, please contact Gloria Simpson, simpsong@uci.edu or 949-824-5788.