Essays in Microeconomics Public Deposited

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  • March 20, 2019
Creator
  • Flanders, Samuel
    • Affiliation: College of Arts and Sciences, Department of Economics
Abstract
  • This dissertation consists of three essays on applied microeconomic theory, focusing on matching markets. The first two essays focus on finding closed form solutions to matching problems. Both generalize Gary Becker's well-known assortative matching results to more general environments. Becker studied a frictionless one-to-one matching environment with vertical or quality-based univariate preferences and found that, the higher one's type, the higher the type of their match will be, an implication that has been extremely influential in empirical work. The first paper generalizes this analysis to an environment where agents care about many traits instead of just one and have more general preferences, rather than restricting attention to vertical preferences. The latter generalizes it to a univariate environment where agents can have any ideal type and preference is decoupled from type, such that different agents of the same type can have different preferences. Both papers provide closed-form matching functions and make empirical predictions about the structure of matching. Theoretical and empirical interest in matching is currently shifting to richer settings where agents have varied preferences and must make tradeoffs between various traits they care about, so foundational work on the qualitative structure of sorting in these settings is necessary to provide intuition for researchers and to direct empirical questions, and closed-form matching functions can make theoretical models with embedded matching problems tractable. In the third essay, I study a search model of online dating with nontransferable utility where agents are vertically differentiated, self-report quality, and must go on costly dates to verify a match's quality. We show that these per-date costs induce some agents to over-report their type, consistent with the stylized facts of online dating platforms where users frequently over-report characteristics like height and income, a phenomenon known as catfishing. This make agents less picky by preventing high types from rejecting some low types, and since externalities in matching markets without transfers can make agents inefficiently picky, these costs can improve total market surplus. A monopolist platform owner may also have an incentive to increase per-date costs in order to increase profits. Thus, inducing lying amongst users can actually be optimal for a platform.
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Rights statement
  • In Copyright
Advisor
  • Li, Fei
  • McManus, Brian
  • Biglaiser, Gary
  • Abdulkadiroglu, Atila
  • Kim, Ju Hyun
  • Norman, Peter
Degree
  • Doctor of Philosophy
Degree granting institution
  • University of North Carolina at Chapel Hill Graduate School
Graduation year
  • 2016
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