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Search with multiple attributes: Theory and empirics

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  • Sanjurjo, Adam

Abstract

Multiple attribute search is a central feature of economic life: we consider much more than price when purchasing a home, and more than wage when choosing a job. Nevertheless, while single attribute search problems have been studied extensively, little is known about optimal search in multiple attribute environments. I introduce a partial characterization of optimal sequential search in a problem with multiple searchable attributes and alternatives, no order restrictions on search, and full recall. Upon applying the partial rational benchmark to a rich dataset I find that subjects systematically deviate from optimal sequential search by: (1) searching too deeply within alternatives and (2) switching too adjacently between alternatives. I explore how these deviations affect payoffs, and discuss why they may be boundedly rational.

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  • Sanjurjo, Adam, 2017. "Search with multiple attributes: Theory and empirics," Games and Economic Behavior, Elsevier, vol. 104(C), pages 535-562.
    • Handle: RePEc:eee:gamebe:v:104:y:2017:i:c:p:535-562
    DOI: 10.1016/j.geb.2017.05.009
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    2. Tamer Boyaci, & Caner Canyakmaz, & Francis de Véricourt,, 2020. "Human and machine: The impact of machine input on decision-making under cognitive limitations," ESMT Research Working Papers ESMT-20-02, ESMT European School of Management and Technology.
    3. Ian Chadd & Emel Filiz-Ozbay & Erkut Y. Ozbay, 2021. "The relevance of irrelevant information," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 985-1018, September.
    4. Duffy, Sean & Smith, John, 2020. "An economist and a psychologist form a line: What can imperfect perception of length tell us about stochastic choice?," MPRA Paper 99417, University Library of Munich, Germany.
    5. Annie Liang & Xiaosheng Mu & Vasilis Syrgkanis, 2022. "Dynamically Aggregating Diverse Information," Econometrica, Econometric Society, vol. 90(1), pages 47-80, January.
    6. Duffy, Sean & Gussman, Steven & Smith, John, 2019. "Judgments of length in the economics laboratory: Are there brains in choice?," MPRA Paper 93126, University Library of Munich, Germany.
    7. Annie Liang & Xiaosheng Mu & Vasilis Syrgkanis, 2019. "Optimal and Myopic Information Acquisition," Working Papers 2019-25, Princeton University. Economics Department..
    8. Annie Liang & Xiaosheng Mu & Vasilis Syrgkanis, 2021. "Dynamically Aggregating Diverse Information," Working Papers 2021-43, Princeton University. Economics Department..
    9. Annie Liang & Xiaosheng Mu & Vasilis Syrgkanis, 2019. "Dynamically Aggregating Diverse Information," Papers 1910.07015, arXiv.org, revised Apr 2021.

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    More about this item

    Keywords

    Search theory; Optimal sequential search; Multiple attributes; Procedural cognition; Bounded rationality; Working memory capacity;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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