IDEAS home Printed from https://ideas.repec.org/a/wly/iecrev/v63y2022i2p803-829.html
   My bibliography  Save this article

Sequential Search With Adaptive Intensity

Author

Listed:
  • Joosung Lee
  • Daniel Li

Abstract

This article studies sequential search problems, where a searcher chooses search intensity adaptively in each period. We fully characterize the optimal search rule and value, decomposing the intertemporal change of search intensity into the fall‐back value effect and the deadline effect. We show that the optimal search intensity (value) is submodular (supermodular) in fall‐back value and time. It follows that the fall‐back value effect increases when the deadline approaches, and the deadline effect decreases when a searcher's fall‐back value gets higher. We further investigate the connection between search with full and no recall to quantify the value of recall.

Suggested Citation

  • 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.
    • Handle: RePEc:wly:iecrev:v:63:y:2022:i:2:p:803-829
    DOI: 10.1111/iere.12551
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/iere.12551
    Download Restriction: no
    File URL: https://libkey.io/10.1111/iere.12551?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Benhabib, Jess & Bull, Clive, 1983. "Job Search: The Choice of Intensity," Journal of Political Economy, University of Chicago Press, vol. 91(5), pages 747-764, October.
    2. Lippman, Steven A. & McCall, John J., 1976. "Job search in a dynamic economy," Journal of Economic Theory, Elsevier, vol. 12(3), pages 365-390, June.
    3. Jia, Hao & Skaperdas, Stergios & Vaidya, Samarth, 2013. "Contest functions: Theoretical foundations and issues in estimation," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 211-222.
    4. 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.
    5. Taylor, Curtis R, 1995. "Digging for Golden Carrots: An Analysis of Research Tournaments," American Economic Review, American Economic Association, vol. 85(4), pages 872-890, September.
    6. Ying Chen & Hulya Eraslan, 2018. "Learning While Setting Precedents," Koç University-TUSIAD Economic Research Forum Working Papers 1810, Koc University-TUSIAD Economic Research Forum.
    7. Poblete, Joaquín & Spulber, Daniel, 2017. "Managing innovation: Optimal incentive contracts for delegated R&D with double moral hazard," European Economic Review, Elsevier, vol. 95(C), pages 38-61.
    8. Dye, Ronald A, 1993. "Auditing Standards, Legal Liability, and Auditor Wealth," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 887-914, October.
    9. Weitzman, Martin L, 1979. "Optimal Search for the Best Alternative," Econometrica, Econometric Society, vol. 47(3), pages 641-654, May.
    10. Simunic, Da, 1980. "The Pricing Of Audit Services - Theory And Evidence," Journal of Accounting Research, Wiley Blackwell, vol. 18(1), pages 161-190.
    11. Vishwanath, Tara, 1992. "Parallel Search for the Best Alternative," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(4), pages 495-507, October.
    12. Ying Chen & Hülya Eraslan, 2020. "Learning while setting precedents," RAND Journal of Economics, RAND Corporation, vol. 51(4), pages 1222-1252, December.
    13. Peter B. Morgan, 1983. "Search and Optimal Sample Sizes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(4), pages 659-675.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Büchel, Jan & Klös, Hans-Peter, 2022. "Metaverse: Hype oder "next big thing"? : Potenziale und Erfolgsbedingungen," IW-Reports 42/2022, Institut der deutschen Wirtschaft (IW) / German Economic Institute.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Otso Massala & Ilia Tsetlin, 2015. "Search Before Trade-offs Are Known," Decision Analysis, INFORMS, vol. 12(3), pages 105-121.
    2. DeSarbo, Wayne S. & Choi, Jungwhan, 1998. "A latent structure double hurdle regression model for exploring heterogeneity in consumer search patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 423-455, November.
    3. 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.
    4. Poblete, Joaquín & Spulber, Daniel, 2017. "Managing innovation: Optimal incentive contracts for delegated R&D with double moral hazard," European Economic Review, Elsevier, vol. 95(C), pages 38-61.
    5. Joosung Lee & Daniel Z. Li, 2023. "Seller Compound Search for Bidders," Journal of Industrial Economics, Wiley Blackwell, vol. 71(4), pages 1004-1037, December.
    6. Smith, Deborah Drummond & Gleason, Kimberly C. & Kannan, Yezen H., 2021. "Auditor liability and excess cash holdings: Evidence from audit fees of foreign incorporated firms," International Review of Financial Analysis, Elsevier, vol. 78(C).
    7. Ray Ball, 2009. "Market and Political/Regulatory Perspectives on the Recent Accounting Scandals," Journal of Accounting Research, Wiley Blackwell, vol. 47(2), pages 277-323, May.
    8. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2009. "Does the public employment service affect search effort and outcomes?," European Economic Review, Elsevier, vol. 53(7), pages 846-869, October.
    9. Jacques Crémer & Yossi Spiegel & Charles Zheng, 2009. "Auctions with costly information acquisition," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 38(1), pages 41-72, January.
    10. Edward A. Baryla, Jr. & Leonard V. Zumpano & Harold W. Elder, 2000. "An Investigation of Buyer Search in the Residential Real Estate Market under Different Market Conditions," Journal of Real Estate Research, American Real Estate Society, vol. 20(1), pages 75-91.
    11. Manning, Richard & Manning, Julian R. A., 1997. "Budget-constrained search," European Economic Review, Elsevier, vol. 41(9), pages 1817-1834, December.
    12. Cosnita-Langlais, Andreea & Tropeano, Jean-Philippe, 2022. "Learning by litigating: An application to antitrust commitments," International Journal of Industrial Organization, Elsevier, vol. 80(C).
    13. Anna Bergman Brown & Nicole M. Heron & Hagit Levy & Emanuel Zur, 2023. "StoneRidge Investment Partners v. Scientific Atlanta: A Test of Auditor Litigation Risk," Journal of Business Ethics, Springer, vol. 187(3), pages 517-538, October.
    14. Adam, Klaus, 2001. "Learning While Searching for the Best Alternative," Journal of Economic Theory, Elsevier, vol. 101(1), pages 252-280, November.
    15. Joseph Weber & Michael Willenborg & Jieying Zhang, 2008. "Does Auditor Reputation Matter? The Case of KPMG Germany and ComROAD AG," Journal of Accounting Research, Wiley Blackwell, vol. 46(4), pages 941-972, September.
    16. Gillan, Stuart L. & Panasian, Christine A., 2014. "On Litigation Risk and Disclosure Complexity: Evidence from Canadian Firms Cross-Listed in the US," The International Journal of Accounting, Elsevier, vol. 49(4), pages 426-454.
    17. Ball, Fiona & Tyler, Jonathan & Wells, Peter, 2015. "Is audit quality impacted by auditor relationships?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 11(2), pages 166-181.
    18. Breuer, Matthias & Le, Anthony & Vetter, Felix, 2023. "Audit mandates, audit firms, and auditors," Working Papers 333, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    19. Giebe, Thomas, 2014. "Innovation contests with entry auction," Journal of Mathematical Economics, Elsevier, vol. 55(C), pages 165-176.
    20. Aobdia, Daniel & Shroff, Nemit, 2017. "Regulatory oversight and auditor market share," Journal of Accounting and Economics, Elsevier, vol. 63(2), pages 262-287.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:iecrev:v:63:y:2022:i:2:p:803-829. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/deupaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.