Searching Forever After

Yair Antler, Benjamin Bachi

Research output: Contribution to journalArticlepeer-review

Abstract

We study a model of two-sided search in which agents’ strategic reasoning is coarse. In equilibrium, the most desirable agents behave as if they were fully rational, while for all other agents, coarse reasoning results in overoptimism with regard to their prospects in the market. Consequently, they search longer than is optimal. Moreover, agents with intermediate match values may search indefinitely while all other agents eventually marry. We show that the share of eternal singles converges monotonically to one as search frictions vanish. Thus, improvements in search technology may backfire and even lead to market failure.

Original languageEnglish
Pages (from-to)558-590
Number of pages33
JournalAmerican Economic Journal: Microeconomics
Volume14
Issue number3
DOIs
StatePublished - 2022

Fingerprint

Dive into the research topics of 'Searching Forever After'. Together they form a unique fingerprint.

Cite this