Contiguous Search: Exploration and Ambition on Uncharted Terrain

Can Urgun and Leeat Yariv

Journal of Political Economy, 2025, vol. 133, issue 2, 522 - 567

Abstract: We provide a framework for analyzing search across correlated samples. The agent—a mineral prospecting team, a drug company, a politician—tracks observations over a Brownian path. The agent chooses the search speed and retrospectively picks the best observation when deciding to complete the search. We show that the optimal search speed is U-shaped: it is highest when approaching a breakthrough or when nearing search termination. Unlike search across independent samples, search optimally stops when observations are sufficiently discouraging, following a drawdown stopping boundary. We also show the tractability and features of optimal search contracts in our setting.

Date: 2025
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