Project Abstract This is a collaborative project with Dirk Bergemann (9709887). This is a project to conduct three projects concerned with the realization and division of social surplus in dynamic matching environments under uncertainty. Project I presents a dynamic and two-sided matching model when there is imper fect information about the value of the match on both sides of the match. The value of each match between two individuals given by a random variable. More information about the true value of each feasible match can be acquired by repeated sampling. The project analyzes intertemporal pricing and match forma tion when there is competition in prices for the match partners. In an application to the labor market, sufficient conditions for efficient assignment of workers to tasks are identified. Project II is concerned with dynamic bidding behavior under the assumption that the true value of the object is unknown to all parties at the outset, while the bidder that is awarded the object in each period receives additional (private) information about its true worth. Project III continues research on a model of experience good diffusion in a market consisting of buyers with heterogeneous preferences. We study the decisions to adopt a new product by buyers that differ according to their disposable income and other characteristics. Different entry and innovation strategies are analyzed for environments where the new product presents (i) a potential improvement over the established product or (ii) is potentially a substitute of no higher value than the established product.
