Transplants and Implants: The Economics of Self-Improvement.
This article examines equilibrium self-improvement and marriage proposal strategies in a two-sided search model with nontransferable utility. Singles are vertically differentiated--some make better marriage partners than others. A complete characterization of equilibrium is provided. It is shown there are two externalities to self-improvement decisions. Further, these externalities may support multiple Pareto rankable equilibria. By encouraging everybody to self-improve, society can create a situation where everybody is forced to improve to remain "acceptable." But a preferred equilibrium may exist where there is less (costly) self-improvement.
Year of publication: |
2001
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Authors: | Burdett, Ken ; Coles, Melvyn G |
Published in: |
International Economic Review. - Department of Economics. - Vol. 42.2001, 3, p. 597-616
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Publisher: |
Department of Economics |
Saved in:
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