TY - JOUR
T1 - A more general Pandora rule?
AU - Olszewski, Wojciech
AU - Weber, Richard
N1 - Publisher Copyright:
© 2015.
PY - 2015/12/1
Y1 - 2015/12/1
N2 - In a model introduced by Weitzman an agent called Pandora opens boxes sequentially, in whatever order she likes, discovers prizes within, and optimally stops. Her aim is to maximize the expected value of the greatest discovered prize, minus the costs of opening the boxes. The solution, using the so-called Pandora rule, is attractive and has many applications. However, it does not address applications in which the payoff depends on all discovered prizes, rather than just the best of them, nor is it easy to say whether or not some generalized Pandora rule might do so. Here, we establish a sense in which it cannot. We discover that if a generalized Pandora rule is to be optimal for some more general utility, and all model parameters, then the problem can be solved via a second problem having Weitzman's form of utility.
AB - In a model introduced by Weitzman an agent called Pandora opens boxes sequentially, in whatever order she likes, discovers prizes within, and optimally stops. Her aim is to maximize the expected value of the greatest discovered prize, minus the costs of opening the boxes. The solution, using the so-called Pandora rule, is attractive and has many applications. However, it does not address applications in which the payoff depends on all discovered prizes, rather than just the best of them, nor is it easy to say whether or not some generalized Pandora rule might do so. Here, we establish a sense in which it cannot. We discover that if a generalized Pandora rule is to be optimal for some more general utility, and all model parameters, then the problem can be solved via a second problem having Weitzman's form of utility.
KW - Optimal scheduling and stopping
KW - Weitzman's Pandora rule
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U2 - 10.1016/j.jet.2015.10.009
DO - 10.1016/j.jet.2015.10.009
M3 - Article
AN - SCOPUS:84946543500
SN - 0022-0531
VL - 160
SP - 429
EP - 437
JO - Journal of Economic Theory
JF - Journal of Economic Theory
ER -