Two-Sided Optimal Stopping Problem in Marriage Formation

18 giugno 2013, ore 11

Dipartimento di Matematica

Università degli studi di Padova

Via Trieste, 63 - Padova

Seminario Giochi Dinamici
"Two-Sided Optimal Stopping Problem in Marriage Formation"

Elena Parilina (Saint-Petersburg State University), Alessandro Tampieri (University of Bologna)

In the paper we study marriage formation through a two-sided secretary problem approach. We consider players with nontrasferable utility and two different characteristics: the first one evaluated according to the idiosyncratic preferences of potential partners, and an universally-rankable characteristic. There are two possible states of the world, one in which matching occurs randomly, and the other in which matching occurs between individuals with similar characteristics. We find the Nash equilibrium, the expected number of periods needed to get married and make an analysis of equilibrium strategies. In the paper there are a lot of numerical examples illustrated the theoretical results.