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Stochastic sorting
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PRE
AI
DOI：10.1016/j.jet.2026.106146.png)
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Abstract
En 中文
In many economic settings, matching takes place under imperfect information about agents' characteristics that are payoff-relevant to the match. This paper develops a matching model in which agents' payoff-relevant characteristics are realized after matching takes place, and matching is based on the agents' observable ex-ante characteristics, which stochastically determine the payoff-relevant ones. We derive conditions for positive and negative sorting. The conditions differ depending on whether agents' characteristics are stochastically larger or more variable as a function of the agents' ex-ante attributes. We apply our framework to risk sharing and household income inequality.
Keywords:
Assortative matching
Mismatch
Risk sharing
Supermodularity
Household inequality
Journal
J
IF:
1.2
Papers:
67
Citations:
0