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Sequential Search with Multiattribute Options

Author

Listed:
  • Churlzu Lim

    (Department of Systems and Industrial Engineering, University of Arizona, Tucson, Arizona 85721)

  • J. Neil Bearden

    (Department of Management and Policy, University of Arizona, Tucson, Arizona 85721)

  • J. Cole Smith

    (Department of Systems and Industrial Engineering, University of Arizona, Tucson, Arizona 85721)

Abstract

We describe a search problem in which a decision maker (DM) must select among sequentially encountered options. Each option is described by multiple attributes, and the value of an option is given by a separable function of its attribute values. However, the attribute values are not known with certainty, and can only be ascertained in a predefined order, at some fixed cost. During the search the DM can choose to select an option, purchase information about an attribute value, reject (permanently) the current option and continue the search, or terminate the search and accept a status quo outcome. We introduce a threshold policy for this search process, and prove the optimality of this policy for separable value functions. We then furnish a dynamic programming procedure for prescribing an optimal policy for this problem. Finally, we derive analytic solutions to some special cases of the problem, and present a case study that demonstrates a possible use of the proposed approach.

Suggested Citation

  • Churlzu Lim & J. Neil Bearden & J. Cole Smith, 2006. "Sequential Search with Multiattribute Options," Decision Analysis, INFORMS, vol. 3(1), pages 3-15, March.
    • Handle: RePEc:inm:ordeca:v:3:y:2006:i:1:p:3-15
    DOI: 10.1287/deca.1050.0044
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Veli Safak, 2020. "Comparative Statics in Multicriteria Search Models," Papers 2006.14452, arXiv.org.
    2. Adam Sanjurjo, 2015. "Search, Memory, and Choice Error: An Experiment," PLOS ONE, Public Library of Science, vol. 10(6), pages 1-16, June.
    3. Chhabra, Meenal & Das, Sanmay & Sarne, David, 2014. "Expert-mediated sequential search," European Journal of Operational Research, Elsevier, vol. 234(3), pages 861-873.
    4. Otso Massala & Ilia Tsetlin, 2015. "Search Before Trade-offs Are Known," Decision Analysis, INFORMS, vol. 12(3), pages 105-121.
    5. Voorberg, S. & van Jaarsveld, W. & Eshuis, R. & van Houtum, G.J., 2023. "Information acquisition for service contract quotations made by repair shops," European Journal of Operational Research, Elsevier, vol. 305(3), pages 1166-1177.
    6. Pantelis P. Analytis & Amit Kothiyal & Konstantinos Katsikopoulos, 2014. "Multi-attribute utility models as cognitive search engines," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 9(5), pages 403-419, September.
    7. Sanjurjo, Adam, 2017. "Search with multiple attributes: Theory and empirics," Games and Economic Behavior, Elsevier, vol. 104(C), pages 535-562.
    8. Dinko Dimitrov & Saptarshi Mukherjee & Nozomu Muto, 2016. "‘Divide-and-choose’ in list-based decision problems," Theory and Decision, Springer, vol. 81(1), pages 17-31, June.
    9. repec:cup:judgdm:v:9:y:2014:i:5:p:403-419 is not listed on IDEAS

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