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Optimal search from multiple distributions with infinite horizon

Author

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  • Jean-Michel Benkert
  • Igor Letina
  • Georg Nöldeke

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 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

  • Jean-Michel Benkert & Igor Letina & Georg Nöldeke, 2017. "Optimal search from multiple distributions with infinite horizon," ECON - Working Papers 262, Department of Economics - University of Zurich, revised Dec 2017.
    • Handle: RePEc:zur:econwp:262
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    File URL: https://www.zora.uzh.ch/id/eprint/139697/7/econwp262.pdf
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    References listed on IDEAS

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    1. Dimitri P. Bertsekas & John N. Tsitsiklis, 1991. "An Analysis of Stochastic Shortest Path Problems," Mathematics of Operations Research, INFORMS, vol. 16(3), pages 580-595, August.
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    6. Weitzman, Martin L, 1979. "Optimal Search for the Best Alternative," Econometrica, Econometric Society, vol. 47(3), pages 641-654, May.
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    8. Karni, Edi & Schwartz, Aba, 1977. "Search theory: The case of search with uncertain recall," Journal of Economic Theory, Elsevier, vol. 16(1), pages 38-52, October.
    9. Lippman, Steven A & McCall, John J, 1976. "The Economics of Job Search: A Survey," Economic Inquiry, Western Economic Association International, vol. 14(3), pages 347-368, September.
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    Cited by:

    1. Gene M. Grossman & Elhanan Helpman, 2020. "When Tariffs Disturb Global Supply Chains," NBER Working Papers 27722, National Bureau of Economic Research, Inc.
    2. Gene M Grossman & Elhanan Helpman, 2021. "When Tariffs Disrupt Global Supply Chains," Working Papers 274, Princeton University, Department of Economics, Center for Economic Policy Studies..
    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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