Search from an unknown distribution: An explicit solution

DOI10.1016/S0022-0531(05)80045-6MaRDI QIDQ1196664zbMATH OpenFDO

Authors Gabriel Talmain

Publication date 16 January 1993

Published in Journal of Economic Theory (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1016/S0022-0531(05)80045-6

zbMATH Keywords

Bayesian searchDirichlet beliefsoptimal strategy

Mathematics Subject Classification ID

Stopping times; optimal stopping problems; gambling theory (60G40) Search theory (90B40)

Review text

This paper derives the optimal strategy of an agent who searches with recall from an unknown distribution and who holds Dirichlet beliefs. Providing his priors are accurate, this searcher will immediately accept an offer which would have terminated his search had he known for sure the distribution, but if unlucky he may eventually accept a lower wage. In the latter case, as he accumulates more experience, he is increasingly reluctant to do so. This paper also explains why some workers become discouraged.

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Cites work

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Cited in

(6)

• Optimal search with learning
• A model of temporary search market equilibrium
• Good news and bad news: Search from unknown wage offer distributions
• Learning while searching for the best alternative
• Optimal inventory policies when the demand distribution is not known
• Nonparametric search

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