Question: Consider the static search and matching model analyzed in equations (11.71) (11.75). Suppose, however, that the matching function, M(), is not assumed to be Cobb

Consider the static search and matching model analyzed in equations (11.71)

(11.75). Suppose, however, that the matching function, M(•), is not assumed to be Cobb Douglas or to have constant returns. Is the condition for the decentralized equilibrium to be efficient still that the elasticity of matches with respect to vacancies, V MV (U,V )/M(U,V ), equals the share of surplus going to the firm, 1 −φ? (Assume that M(•) is smooth and well-behaved, and that VEQ and V ∗ are strictly positive.)

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