Pandora’s rules in the laboratory

Efthymios Lykopoulos (), Georgios Voucharas and Dimitrios Xefteris
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Efthymios Lykopoulos: University of Cyprus

Experimental Economics, 2022, vol. 25, issue 5, No 9, 1492-1514

Abstract: Abstract In theory, search conditions are a key determinant of Pandora’s rule (i.e. of the optimal search pattern), and of the eventual payoffs (Weitzman, 1979; Doval, 2018). We compare different search conditions in the laboratory and find strong evidence that they affect subjects’ order of inspection and payoffs greatly. Subjects are more conservative at the beginning of the search, and earn less if they are constrained to choose only among the inspected alternatives, than if they are not. These findings reinforce the empirical pertinence of the formal search literature, and generate novel insights regarding relevant settings of applied interest (e.g. the impact of market digitization on consumer behavior).

Keywords: Pandora’s rule; Laboratory experiment; Weitzman; Search (search for similar items in EconPapers)
JEL-codes: C91 D81 D83 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10683-022-09770-x

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