ECONOMIC SEARCH: AN EXPERIMENTAL STUDY

Andrew Schotter, YALE M. BRAUNSTEIN

    Research output: Contribution to journalArticle

    Abstract

    This paper presents results of experiments designed to test several of the hypotheses present in the theoretical literature on “optimal” economic search. First we test whether the subjects (searchers) actually search for wages in ways that are consistent with setting an optimal reservation wage. We then proceed to determine experimentally the effects of risk aversion, increased search costs, changes in risk (brought about by a mean‐preserving transformation of the distribution of wage offers), the presence or absence of recall, the existence of a finite horizon, and the searcher's state of knowledge about the underlying distribution of wages. In general, we find that the searchers exhibit behavior that is consistent with that predicted by theory. Differences between risk neutral and risk averse searchers are found, and the responses of both groups to changes in search costs, in the degree of risk, or in the state of knowledge are consistent with theoretical predictions.

    Original languageEnglish (US)
    Pages (from-to)1-25
    Number of pages25
    JournalEconomic Inquiry
    Volume19
    Issue number1
    DOIs
    StatePublished - 1981

    Fingerprint

    Economics
    Experimental study
    Wages
    Search costs
    Finite horizon
    Risk-averse
    Reservation wage
    Risk aversion
    Prediction
    Experiment

    ASJC Scopus subject areas

    • Business, Management and Accounting(all)
    • Economics and Econometrics

    Cite this

    ECONOMIC SEARCH : AN EXPERIMENTAL STUDY. / Schotter, Andrew; BRAUNSTEIN, YALE M.

    In: Economic Inquiry, Vol. 19, No. 1, 1981, p. 1-25.

    Research output: Contribution to journalArticle

    Schotter, A & BRAUNSTEIN, YALEM 1981, 'ECONOMIC SEARCH: AN EXPERIMENTAL STUDY', Economic Inquiry, vol. 19, no. 1, pp. 1-25. https://doi.org/10.1111/j.1465-7295.1981.tb00600.x
    Schotter, Andrew ; BRAUNSTEIN, YALE M. / ECONOMIC SEARCH : AN EXPERIMENTAL STUDY. In: Economic Inquiry. 1981 ; Vol. 19, No. 1. pp. 1-25.
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