|Title: The Comparative Statics of Differential Rents in Two-Sided Matching Markets|
|Reference Number: 1147|
|Publication Date: September 2005|
| Author(s): |
Chinese University of Hong Kong
This paper studies how shifts in the distribution of quality on one side of the market affects earnings
on the other side in a model of one-to-one matching. A more dispersed distribution of quality hurts the low ability agents on the other side because they are matched to inferior partners. Earnings being a differential rent in these markets, this pulls down the earnings of high quality agents as well. It is shown
that a more dispersed ability distribution reduces total earnings
on the opposite side of the market. Under some conditions, all
agents on that side are hurt.
Published in Journal of Economic Inequality 5 (October 2006), pp. 149-158.
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