Discussion Papers,
Statistics Norway, Research Department

Abstract: This paper develops aggregate relations for a matching market of heterogeneous suppliers and demanders. The point of departure is the analysis of two-sided matching found in Roth and Sotomayor (1990). Under particular assumptions about the distribution of preferences, the present paper derives asymptotic aggregate relations for the number of realized matches of different types in the presence of flexible contracts (such as a price). Simulation experiments demonstrate that the model also provides excellent predictions in small populations.

Keywords: two-sided matching models; discrete choice; market equilibrium; marriage models; the Golden Section.

JEL-codes: C78; J41 April 1996

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