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Simultaneous Search

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Author Info
Hector Chade (Dept. of Economics, Arizona State University)
Lones Smith (Dept. of Economics, University of Michigan)

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Abstract

We introduce and solve a new class of "downward-recursive" static portfolio choice problems. An individual simultaneously chooses among ranked stochastic options, and each choice is costly. In the motivational application, just one may be exercised from those that succeed. This often emerges in practice, such as when a student applies to many colleges. We show that a greedy algorithm finds the optimal set. The optimal choices are "less aggressive" than the sequentially optimal ones, but "more aggressive" than the best singletons. The optimal set in general contains gaps. We provide a comparative static on the chosen set.

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File URL: http://cowles.econ.yale.edu/P/cd/d15b/d1556.pdf
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Publisher Info
Paper provided by Cowles Foundation, Yale University in its series Cowles Foundation Discussion Papers with number 1556.

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Length: 16 pages
Date of creation: Jan 2006
Date of revision:
Handle: RePEc:cwl:cwldpp:1556

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Related research
Keywords: college application submodular optimization greedy algorithm directed search

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Find related papers by JEL classification:
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kenneth Burdett & Shouyong Shi & Randall Wright, 2001. "Pricing and Matching with Frictions," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 1060-1085, October. [Downloadable!] (restricted)
  2. Weitzman, Martin L, 1979. "Optimal Search for the Best Alternative," Econometrica, Econometric Society, vol. 47(3), pages 641-54, May. [Downloadable!] (restricted)
    Other versions:
  3. Burdett, Kenneth & Judd, Kenneth L, 1983. "Equilibrium Price Dispersion," Econometrica, Econometric Society, vol. 51(4), pages 955-69, July. [Downloadable!] (restricted)
  4. Milgrom, Paul & Shannon, Chris, 1994. "Monotone Comparative Statics," Econometrica, Econometric Society, vol. 62(1), pages 157-80, January. [Downloadable!] (restricted)
    Other versions:
  5. Gul, Faruk & Stacchetti, Ennio, 1999. "Walrasian Equilibrium with Gross Substitutes," Journal of Economic Theory, Elsevier, vol. 87(1), pages 95-124, July. [Downloadable!] (restricted)
  6. James Albrecht & Pieter A. Gautier & Susan Vroman, 2006. "Equilibrium Directed Search with Multiple Applications," Review of Economic Studies, Blackwell Publishing, vol. 73(4), pages 869-891, October. [Downloadable!] (restricted)
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  7. Hector Chade & Lones Smith, 2005. "Simultaneous Search," NajEcon Working Paper Reviews 172782000000000033, www.najecon.org. [Downloadable!]
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  8. Kelso, Alexander S, Jr & Crawford, Vincent P, 1982. "Job Matching, Coalition Formation, and Gross Substitutes," Econometrica, Econometric Society, vol. 50(6), pages 1483-1504, November. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Pieter A. Gautier & José Luis Moraga-González & Ronald P. Wolthoff, 2007. "Structural Estimation of Search Intensity: Do Non-Employed Workers Search Enough?," Tinbergen Institute Discussion Papers 07-071/3, Tinbergen Institute. [Downloadable!]
    Other versions:
  2. Pieter A. Gautier & Ronald P. Wolthoff, 2006. "Simultaneous Search with Heterogeneous Firms and Ex Post Competition," IZA Discussion Papers 2056, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Manolis Galenianos & Philipp A. Kircher, 2005. "Directed Search with Multiple Job Applications," Bonn Econ Discussion Papers bgse20_2005, University of Bonn, Germany. [Downloadable!]
    Other versions:
  4. Hector Chade & Lones Smith, 2006. "Simultaneous Search," Cowles Foundation Discussion Papers 1556, Cowles Foundation, Yale University. [Downloadable!]
    Other versions:
  5. Philipp Kircher, 2008. "Efficiency of Simultaneous Search," PIER Working Paper Archive 08-004, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania. [Downloadable!]
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