Agents in a finite two-sided market are matched assortatively, based on costly investments. Besides signaling private, complementary types, investments generate direct benefits for partners. We explore quantitative properties of the equilibrium investment behavior. The bilateral external...

Agents in a finite two-sided market make costly investments and are then matched assortatively based on these investments. Besides signaling complementary types, investments also generate benefits for partners. We shed light on quantitative properties of the equilibrium investment behavior. The...

The paper aims to provide a possible explanation for the occurrence of uniform, fixed-proportion rules for sharing surplus in two-sided markets. We study a two-sided matching model with transferable utility where agents are characterized by privately known, multi-dimensional attributes that...

Agents in a finite two-sided market make costly investments and are then matched assortatively based on these investments. Besides signaling complementary types, investments also generate benefits for partners. We shed light on quantitative properties of the equilibrium investment behavior. The...

Heterogeneous buyers and sellers must make investments before entering a continuum assignment market. I show that efficient ex-post contracting equilibria (Cole, Mailath and Postlewaite 2001a) exist in a general assignment game framework. I then shed light on what enables and what precludes...