MATCHING WITH PHANTOMS

Ce Working Paper fait l'objet d'une publication in The Review of Economic Studies, Volume 84, Issue 3, 1 July 2017, Pages 1041–1070, https://doi.org/10.1093/restud/rdw032〈hal-01679258〉Searching for partners involves informational persistence that reduces future traders' matching probability. In this paper, traders that are no longer available but who left tracks on the market are called phantoms. I examine a discrete-time matching market in which phantom traders are a by-product of search activity, no coordination frictions are assumed, and non-phantom traders may lose time trying to match with phantom traders. The resulting aggregate matching technology features increasing returns to scale in the short run, but has constant returns to scale in the long run. I discuss the labor market evidence and argue that there is observational equivalence between phantom unemployed and on-the-job seekers