Search and satisficing

Andrew Caplin*, Mark Dean, Daniel Martin

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

116 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)2899-2922
Number of pages24
JournalAmerican Economic Review
Volume101
Issue number7
DOIs
StatePublished - Dec 1 2011

ASJC Scopus subject areas

  • Economics and Econometrics

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