Transplants and Implants: The Economics of Self‐Improvement

<jats:p>This article examines equilibrium self‐improvement and marriage proposal strategies in a two‐sided search model with nontransferable utility. Singles are vertically differentiated—some make better marriage partners than others. A complete characterization of equilibrium is provided. It is shown there are two externalities to self‐improvement decisions. Further, these externalities may support multiple Pareto rankable equilibria. By encouraging everybody to self‐improve, society can create a situation where everybody is forced to improve to remain “acceptable.” But a preferred equilibrium may exist where there is less (costly) self‐improvement.</jats:p>