TY - JOUR
T1 - Search and satisficing
AU - Caplin, Andrew
AU - Dean, Mark
AU - Martin, Daniel
PY - 2011/12/1
Y1 - 2011/12/1
N2 - Many everyday decisions are made without full examination of all available options, and, as a result, the best available option may be missed. We develop a search-theoretic choice experiment to study the impact of incomplete consideration on the quality of choices. We find that many decisions can be understood using the satisficing model of Herbert Simon (1955): most subjects search sequentially, stopping when a "satisficing" level of reservation utility is realized. We find that reservation utilities and search order respond systematically to changes in the decision making environment.
AB - Many everyday decisions are made without full examination of all available options, and, as a result, the best available option may be missed. We develop a search-theoretic choice experiment to study the impact of incomplete consideration on the quality of choices. We find that many decisions can be understood using the satisficing model of Herbert Simon (1955): most subjects search sequentially, stopping when a "satisficing" level of reservation utility is realized. We find that reservation utilities and search order respond systematically to changes in the decision making environment.
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U2 - 10.1257/aer.101.7.2899
DO - 10.1257/aer.101.7.2899
M3 - Article
AN - SCOPUS:83755220448
VL - 101
SP - 2899
EP - 2922
JO - American Economic Review
JF - American Economic Review
SN - 0002-8282
IS - 7
ER -