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Recall Searching with and without Recall

Author

Listed:
  • Daniela Di Cagno

    (Department of Economics and Finance, LUISS Guido Carli University of Rome, Italy)

  • Tibor Neugebauer

    (Luxembourg School of Finance, University of Luxembourg, Luxembourg)

  • Carlos Rodriguez-Palmero

    (Department of Applied Economics, University of Valladolid, Spain)

  • Abdolkarim Sadrieh

    (Department of Economics, University of Magdeburg, Germany)

Abstract

We revisit the sequential search problem by Hey (1987). In a 2x2 factorial design, varying fixed and random cost treatments with and without recall, we address open research questions that were originally stated by Hey (1987). Our results provide clear evidence for Hey’s (1987) conjecture that recall negatively affects performance in sequential search. With experience, however, search behaviour with and without recall converges towards the optimal reservation rule. We further find that the utilization of reservation optimal rules are independent from the stochastic nature of the search cost.

Suggested Citation

  • Daniela Di Cagno & Tibor Neugebauer & Carlos Rodriguez-Palmero & Abdolkarim Sadrieh, 2014. "Recall Searching with and without Recall," Working Papers 2014/14, Economics Department, Universitat Jaume I, Castellón (Spain).
    • Handle: RePEc:jau:wpaper:2014/14
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    References listed on IDEAS

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    1. Sonnemans, Joep, 1998. "Strategies of search," Journal of Economic Behavior & Organization, Elsevier, vol. 35(3), pages 309-332, April.
    2. Schunk, Daniel & Winter, Joachim, 2009. "The relationship between risk attitudes and heuristics in search tasks: A laboratory experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 347-360, August.
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    13. Daniela Cagno & Tibor Neugebauer & Carlos Rodriguez-Palmero & Abdolkarim Sadrieh, 2014. "Recall searching with and without recall," Theory and Decision, Springer, vol. 77(3), pages 297-311, October.
    14. Hey, John D., 1981. "Are optimal search rules reasonable? and vice versa? (And does it matter anyway?)," Journal of Economic Behavior & Organization, Elsevier, vol. 2(1), pages 47-70, March.
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    Cited by:

    1. Miura, Takahiro & Inukai, Keigo & Sasaki, Masaru, 2019. "Testing the Reference-Dependent Model: A Laboratory Search Experiment," IZA Discussion Papers 12378, Institute of Labor Economics (IZA).
    2. Daniela Cagno & Tibor Neugebauer & Carlos Rodriguez-Palmero & Abdolkarim Sadrieh, 2014. "Recall searching with and without recall," Theory and Decision, Springer, vol. 77(3), pages 297-311, October.

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    More about this item

    Keywords

    Experiments; Search; Stopping rule; Recall Effect;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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