The comparative statics of sorting
By: Anderson, Axel and Smith, Lones
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Material type: 
BookPublisher: The American Economic Review Description: 114(3), Mar, 2024: p.709-751.Subject(s): Pairwise matching models, Monetary transfers, positive quadrant dependence, sorting theory, synergy, match production, diminishing returns, technological convexity, insurance, learning dynamics, regression coefficients
In:
The American Economic ReviewSummary: We create a general and tractable theory of increasing sorting in pairwise matching models with monetary transfers. The positive quadrant dependence partial order subsumes Becker (1973) as the extreme cases with most and least sorting and implies increasing regression coefficients. Our theory turns on synergy—the cross-partial difference or derivative of match production. This reflects basic economic forces: diminishing returns, technological convexity, insurance, and learning dynamics. We prove sorting increases if match synergy globally increases, and is cross-sectionally monotone or single crossing. We use our results to derive sorting predictions in major economics sorting papers and in new applications.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/aer.20210890
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | 114(3), Mar, 2024: p.709-751 | Available | AR131749 |
We create a general and tractable theory of increasing sorting in pairwise matching models with monetary transfers. The positive quadrant dependence partial order subsumes Becker (1973) as the extreme cases with most and least sorting and implies increasing regression coefficients. Our theory turns on synergy—the cross-partial difference or derivative of match production. This reflects basic economic forces: diminishing returns, technological convexity, insurance, and learning dynamics. We prove sorting increases if match synergy globally increases, and is cross-sectionally monotone or single crossing. We use our results to derive sorting predictions in major economics sorting papers and in new applications.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/aer.20210890
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