In this paper, I analyze a decentralized search and matching economy with transferable utility composed of heterogeneous agents. I explore whether Becker's assortative matching result generalizes to an economy where agents engage in costly search. In an economy with explicit additive search costs, complementarities in joint production (supermodularity of the joint production function) lead to assortative matching. This is in contrast to previous literature, which had shown that in a search economy with discounting, assortative matching may fail even when the joint production function is supermodular.

We study a uniform-price auction where k identical common-value objects are allocated amongst z > k bidders who have imperfect signals about the state of the world. The common valuation is determined jointly by the state and an action that is chosen after winning an object. In large auctions, there are symmetric equilibria where the auction price aggregates no information. Moreover, market statistics other than price (e.g., the amount of rationing or the bid distribution) contain extra information about the state. In contrast, in standard large auctions without actions, the price aggregates all relevant information.