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Optimal search from multiple distributions with infinite horizon

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  • Benkert, Jean-Michel
  • Letina, Igor
  • Nöldeke, Georg

Abstract

With infinite horizon, optimal rules for sequential search from a known distribution feature a constant reservation value that is independent of whether recall of past options is possible. We extend this result to the case when there are multiple distributions to choose from: it is optimal to sample from the same distribution in every period and to continue searching until a constant reservation value is reached.

Suggested Citation

  • Benkert, Jean-Michel & Letina, Igor & Nöldeke, Georg, 2018. "Optimal search from multiple distributions with infinite horizon," Economics Letters, Elsevier, vol. 164(C), pages 15-18.
    • Handle: RePEc:eee:ecolet:v:164:y:2018:i:c:p:15-18
    DOI: 10.1016/j.econlet.2017.12.032
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    References listed on IDEAS

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    Cited by:

    1. Gene M. Grossman & Elhanan Helpman, 2021. "When Tariffs Disrupt Global Supply Chains," Working Papers 2021-73, Princeton University. Economics Department..
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    3. Joosung Lee & Daniel Li, 2022. "Sequential Search With Adaptive Intensity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(2), pages 803-829, May.

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    More about this item

    Keywords

    Optimal search; Search intensity; Infinite horizon; Recall;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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