Efficiency of thin and thick markets Academic Article

abstract

• 2015 Elsevier B.V. In this paper, we propose a matching model to study the efficiency of thin and thick markets. Our model shows that the probabilities of matches in a thin market are significantly lower than those in a thick market. When applying our results to a job search model, it implies that, if the ratio of job candidates to job openings remains (roughly) a constant, the probability that a person can find a job is higher in a thick market than in a thin market. We apply our matching model to the U.S. academic market for new PhD economists. Consistent with the prediction of our model, a field of specialization with more job openings and more candidates has a higher probability of matching.

authors

• Gan, Li
• Li, Qi

published proceedings

• JOURNAL OF ECONOMETRICS

altmetric score

• 11.5

author list (cited authors)

• Gan, L. i., & Li, Q. i.

citation count

• 11

complete list of authors

• Gan, Li||Li, Qi

publication date

• January 2016

publisher

• Elsevier  Publisher

published in

• Journal of Econometrics  Journal

keywords

• Empirical Application
• Market Efficiency
• Matching Function
• Microfoundation
• Thin And Thick Market

Digital Object Identifier (DOI)

• 10.1016/j.jeconom.2015.10.012

start page

• 40

end page

• 54

volume

• 192

issue

• 1

URL

• http://dx.doi.org/10.1016/j.jeconom.2015.10.012