Partnership formation based on multiple traits

European Journal of Operational Research, 2012, vol. 216, issue 3, 624-637

Abstract: A model of partnership formation based on two traits, called beauty and character, is presented. There are two classes of individual and partners must be of different classes. Individuals prefer prospective partners with a high beauty measure and of a similar character. This problem may be interpreted as e.g. a job search problem in which the classes are employer and employee, or a mate choice problem in which the classes are male and female. Beauty can be observed instantly. However, a costly date (or interview) is required to observe the character of a prospective partner. On observing the beauty of a prospective partner, an individual decides whether he/she wishes to date. During a date, the participants observe each other’s character and then decide whether to form a pair. Mutual acceptance is required both for a date to occur and pair formation. On finding a partner, an individual stops searching. Beauty has a continuous distribution on a finite interval, while character ‘forms a circle’ and has a uniform distribution. Criteria based on the concept of a subgame perfect Nash equilibrium are used to define a symmetric equilibrium of this game. It is argued that this equilibrium is unique. When dating costs are high, this equilibrium is a block separating equilibrium as in more classical formulations of two-sided job search problems. However, for sufficiently small dating costs the form of this equilibrium is essentially different.

Keywords: Game theory; Partnership formation; Multiple traits; Subgame perfect equilibrium (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:216:y:2012:i:3:p:624-637

DOI: 10.1016/j.ejor.2011.08.013

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