Fashion Statement

Review of Economic Dynamics, 2009, vol. 12, issue 4, 668-677

Abstract: We study bilateral matching under private information about agents' characteristics. Assortative matching is the only equilibrium outcome in the absence of private information. When an information friction is present, the matching process can be improved if a payoff-irrelevant variable which we term "fashion" is introduced. Informed agents choose to adopt fashion as a signaling device. If success in matching is observed, other agents can imitate the signal. Thus, for fashion to be useful, it must constantly change. If there are more than two types of agents, both "high" and "low" fashion are needed to facilitate assortative matching. (Copyright: Elsevier)

Keywords: Fashion; Private information; Matching (search for similar items in EconPapers)
JEL-codes: D83 D9 (search for similar items in EconPapers)
Date: 2009
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Working Paper: Fashion Statement (2004)
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DOI: 10.1016/j.red.2009.02.005

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