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Search from an unkown distribution an explicit solution

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  • Talmain, Gabriel

Abstract

This paper derives the optimal strategy of a searcher who searches with recall from an unknown distribution and who holds Dirichlet beliefs. Providing his priors are accurate, this searcher will immediately accept an offer which would have terminated his search had he known for sure the distribution, but if unlucky he may eventually accept a lower wage. In the latter case, as he accumulates more experience, he is increasingly reluctant to do so. This paper also explains why some workers become discouraged.

Suggested Citation

  • Talmain, Gabriel, 1992. "Search from an unkown distribution an explicit solution," Journal of Economic Theory, Elsevier, vol. 57(1), pages 141-157.
    • Handle: RePEc:eee:jetheo:v:57:y:1992:i:1:p:141-157
    DOI: 10.1016/S0022-0531(05)80045-6
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    References listed on IDEAS

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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
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    8. Gronau, Reuben, 1971. "Information and Frictional Unemployment," American Economic Review, American Economic Association, vol. 61(3), pages 290-301, June.
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    Cited by:

    1. Ed Hopkins & Robert M. Seymour, "undated". "Price Dispersion: an Evolutionary Approach," ELSE working papers 043, ESRC Centre on Economics Learning and Social Evolution.
    2. Sergei Koulayev, 2008. "Estimating search with learning," Working Papers 08-29, NET Institute, revised Oct 2008.

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