Retrospective Search: Exploration and Ambition on Uncharted Terrain

Leeat Yariv and Can Urgun

No 15534, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study a model of retrospective search in which an agent—a researcher, an online shopper, or a politician—tracks the value of a product. Discoveries beget discoveries and their observations are correlated over time, which we model using a Brownian motion. The agent decides both how ambitiously, or broadly, to search, and for how long. We fully characterize the optimal search policy and show that it entails constant scope of search and a simple stopping boundary. We also show the special features that emerge from contracting with a retrospective searcher.

Keywords: Retrospective search; Drawdown stopping boundary; Contracting (search for similar items in EconPapers)
JEL-codes: C61 C73 D83 (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-mic
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