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Search Theory

The New Palgrave Dictionary of Economics

Abstract

Walrasian analysis presumes that resource allocation can be adequately modelled using the assumption of instantaneous and costless coordination of trade. In contrast, Search Theory is the analysis of resource allocation with specified, imperfect technologies for informing agents of their trading opportunities and for bringing together potential traders. The modelling advantages of assuming a frictionless coordination mechanism, plus years of hard work, permit Walrasian analysis to work with very general specifications of individual preferences and production technologies. In contrast, search theorists have explored a variety of special allocation mechanisms together with very simple preferences and production technologies. Lacking more general theories, we examine the catalogue of analyses that have been completed.

This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman

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  1. http://link.springer.com/referencework/10.1007/978-1-349-95121-5

    P. Diamond

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  1. P. Diamond
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    Diamond, P. (1987). Search Theory. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_1535-1

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    • DOI: https://doi.org/10.1057/978-1-349-95121-5_1535-1

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    • Publisher Name: Palgrave Macmillan, London

    • Online ISBN: 978-1-349-95121-5

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    Chapter history

    1. Latest

      Search Theory
      Published:
      13 March 2017

      DOI: https://doi.org/10.1057/978-1-349-95121-5_1535-2

    2. Original

      Search Theory
      Published:
      29 November 2016

      DOI: https://doi.org/10.1057/978-1-349-95121-5_1535-1

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