Publication: Adaptive stochastic search
Program
KU-Authors
KU Authors
Co-Authors
Aguiar, Victor H.
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Type
Embargo Status
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Journal ISSN
Volume Title
Alternative Title
Abstract
We characterize Simon's (1955) search and satisficing model with an adaptive threshold and random search (SM-AT). The decision maker (DM) consistent with the SM-AT is endowed with a utility function, a random search distribution, and a deterministic but menu-dependent threshold. On any given trial, the DM searches the menu and stops whenever she finds an item with a utility level that is above the threshold. This simple choice procedure accommodates the well-known compromise and attraction effects. The SM-AT is more general than the random utility model and allows for systematic departures from regularity. Its characterization lets us differentiate adaptive satisficing behavior from random preference maximization in a (limited) standard stochastic choice data set.
Source
Publisher
Elsevier
Subject
Economics, Mathematics, Social Sciences, Mathematical methods
Citation
Has Part
Source
Journal of Mathematical Economics
Book Series Title
Edition
DOI
10.1016/j.jmateco.2019.01.003