Search theory

Search theory is a theory which is strongly related with economics. Is a theory around the assignation problem. More precisely, search theory studies an individual’s optimal strategy when choosing from a series of potential opportunities of random quality, under the assumption that delaying choice is costly. Search models illustrate how best to balance the cost of delay against the value of the option to try again. Mathematically, search models are optimal stopping problems.

• Microeconomics in which is studied buyers or sellers who cannot instantly find a trading partner, and must therefore search for a partner prior to transacting.
• Labor economics in which is studied frictional unemployment resulting from job hunting by workers.
• Consumer theory used to analyze purchasing decisions.
• Macroeconomics in which is used to study general equilibrium models in which one or more types of searchers interact. These macroeconomic theories have been called ‘matching theory’, or ‘search and matching theory’.

See also

Operations Research

Material

• http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2010/press.pdf

Papers

• Stigler, George J. (1961). The economics of information. Journal of Political Economy 69 (3): 213-225.
• Stigler, George J. (1962). Information in the labor market. Journal of Political Economy 70 (5): 94-105.
• Mortensen, D. (1986). Job search and labor market analysis. In Ashenfelter, O.; Card, D. The Handbook of Labor Economics 2. Amsterdam: North-Holland.
• Butters, G. R. (1977). Equilibrium distributions of sales and advertising prices. Review of Economic Studies 44: 465-491.
• Mortensen, Dale; Pissarides, Christopher (1994). Job creation and job destruction in the theory of unemployment. Review of Economic Studies 61 (3): 397-415.
• McDowell, J. J. Matching theory in natural human environments. The Behavior Analyst 11.2 (1988): 95.

Books

• Lovász, László, and Michael D. Plummer. (2009). Matching theory (Vol. 367). American Mathematical Soc.
• D’Orazio, Marcello, Marco Di Zio, and Mauro Scanu. (2006). Statistical matching: Theory and practice. John Wiley & Sons.
• Pissarides, Christopher (2000). Equilibrium Unemployment Theory (2nd ed.). MIT Press.
• Adda, J.; Cooper, R. (2003). Dynamic Economics: Quantitative Methods and Applications. Cambridge: MIT Press. p. 257.