Two-Sided Search, Marriages and Matchmakers

This paper analyzes the provision of matching services in a model of two-sided search. Agents belong to two populations and are uniformly distributed on [0,1]. Their utility is equal to the index of their mate. In a search equilibrium, as in Mac Namara and Collins (1990), agents form subintervals and are only matched to agents inside their class. Agents of higher quality form larger clusters. Marriage brokers offer to match agents according to a centralized matching procedure. If the matchmaker charges a uniform participation fee to all agents, then she selects to match a subset of agents of higher quality according to the stable identity matching rule. If, on the other hand, the matchmaker can charge different commissions to different agents, she will either choose to match all agents, if the matching cost is low enough, or not to operate.