Search with multiple attributes: Theory and empirics

Adam Sanjurjo

Games and Economic Behavior, 2017, vol. 104, issue C, 535-562

Abstract: Multiple attribute search is a central feature of economic life: we consider much more than price when purchasing a home, and more than wage when choosing a job. Nevertheless, while single attribute search problems have been studied extensively, little is known about optimal search in multiple attribute environments. I introduce a partial characterization of optimal sequential search in a problem with multiple searchable attributes and alternatives, no order restrictions on search, and full recall. Upon applying the partial rational benchmark to a rich dataset I find that subjects systematically deviate from optimal sequential search by: (1) searching too deeply within alternatives and (2) switching too adjacently between alternatives. I explore how these deviations affect payoffs, and discuss why they may be boundedly rational.

Keywords: Search theory; Optimal sequential search; Multiple attributes; Procedural cognition; Bounded rationality; Working memory capacity (search for similar items in EconPapers)
JEL-codes: D11 D12 D81 D83 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:104:y:2017:i:c:p:535-562

DOI: 10.1016/j.geb.2017.05.009

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