DP17965 Search, Dating, and Segregation in Marriage
We study statistical discrimination in a marriage market where agents, characterized by attractiveness (e.g., wealth, education) and background (e.g., race, ethnicity), engage in time-consuming search. Upon meeting, couples date to learn about their match's quality. Following Phelps (1972), different backgrounds impede such learning. We show that even absent any bias, equilibrium features segregation. Moreover, welfare improvements enhance segregation. In particular, radical improvements in search technologies induce complete segregation and a “dating apocalypse'' where agents replace partners frequently. We show that, in line with empirical findings, segregation is decreasing in couples’ attractiveness, and provide conditions for (probabilistic) positive sorting by attractiveness.