Matching theory (economics)

In macroeconomics is the matching theory ( in English also known as search and matching theory ), a mathematical or game-theoretic theory framework, which describes the formation of mutually beneficial relations over time, the length and intensity of the search for matching ( the fit ) of supply and can improve demand.

A founder of the theory is Peter A. Diamond.

Applications

The theory can be applied to all markets where search processes play a central role. Particular importance it acquires matching theory for imperfect markets, which are characterized by a lack of information, uncertainty and frictions. Dale Mortensen and Christopher Pissarides applied the theory in the 1980s systematically on the labor market. Also on the real estate market or the marriage market it is applicable.