TY  - JOUR
AU  - Gan,Li
AU  - Li,Qi
TI  - Efficiency of Thin and Thick Markets
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10815
PY  - 2004
Y2  - October 2004
UR  - http://www.nber.org/papers/w10815
L1  - http://www.nber.org/papers/w10815.pdf
N1  - Author contact info:
Li Gan
Department of Economics
Texas A&M University
College Station, TX 77843-4228
Tel: 979/862-1667
Fax: 979/847-8747
E-Mail: gan@econmail.tamu.edu
AB  - In this paper, we propose a matching model to study the efficiency of thin and thick markets. Our model shows that the probabilities of matches in a thin market are significantly lower than those in a thick market. When applying our results to a job search model, it implies that, if the ratio of job candidates to job openings remains (roughly) a constant, the probability that a person can find a job is higher in a thick market than in a thin market. We apply our matching model to the U.S. academic market for new PhD economists. Consistent with the prediction of our model, a field of specialization with more job openings and more candidates has a higher probability of matching.
ER  -