Search, choice, and revealed preference
Andrew Caplin () and
Mark Dean ()
Theoretical Economics, 2011, vol. 6, issue 1
With complete information, choice of one option over another conveys preference. Yet when search is incomplete, this is not necessarily the case. It may instead reflect unawareness that a superior alternative was available. To separate these phenomena, we consider non-standard data on the evolution of provisional choices with contemplation time. We characterize precisely when the resulting data could have been generated by a general form of sequential search. We characterize also search that terminates based on a reservation utility stopping rule. We outline an experimental design that captures provisional choices in the pre-decision period.
Keywords: Revealed preference; search theory; stochastic choice (search for similar items in EconPapers)
JEL-codes: D11 D83 (search for similar items in EconPapers)
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Persistent link: http://EconPapers.repec.org/RePEc:the:publsh:592
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