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Sequential search by groups with rank-dependent payoffs: An experimental study

Published on Jul 1, 2014in Organizational Behavior and Human Decision Processes2.91
· DOI :10.1016/j.obhdp.2014.03.004
Vincent Mak8
Estimated H-index: 8
(University of Cambridge),
Amnon Rapoport48
Estimated H-index: 48
(UCR: University of California, Riverside),
Darryl A. Seale17
Estimated H-index: 17
(UNLV: University of Nevada, Las Vegas)
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Abstract
In many sequential search situations, decisions are reached by groups. We examine behavior in such situations experimentally using an extension of the “secretary problem”. In our setup, group members (players) with non-aligned preferences inspect alternatives or “applicants” one at a time with no backward solicitation. A minimal information structure is assumed where players are only informed of the relative ranks of the alternatives as they inspect them sequentially. We present the equilibrium solution, and then use it as a benchmark for our analysis. We report the results from a controlled experiment showing that subjects over-searched relative to equilibrium. Decisions were affected by theoretically irrelevant observations including the relative rank of the previous alternative and the other player’s relative rank of the current alternative. For managers engaged in committee sequential search tasks, our findings highlight the importance of being aware to reach compromises early on, among other implications.
  • References (39)
  • Citations (4)
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References39
Newest
Published on Jul 1, 2013in European Economic Review1.71
Yoichi Hizen5
Estimated H-index: 5
(Kochi University of Technology),
Keisuke Kawata2
Estimated H-index: 2
(Hiroshima University),
Masaru Sasaki5
Estimated H-index: 5
(Osaka University)
The objective of this paper is to design a laboratory experiment for an infinite-horizon sequential committee search model in order to test some of the implications obtained by the model in Albrecht, Anderson, and Vroman (2010) (AAV). We find that, compared with single-agent search, the search duration is longer for committee search under the unanimity rule, but is shorter for committee search in which at least one vote is required to stop searching. In addition, according to estimates from roun...
Published on May 1, 2012in Games and Economic Behavior1.00
Vincent Mak8
Estimated H-index: 8
(University of Cambridge),
Amnon Rapoport48
Estimated H-index: 48
(UCR: University of California, Riverside),
Eyran J. Gisches8
Estimated H-index: 8
(UA: University of Arizona)
We propose an equilibrium model of duopolistic dynamic pricing in which a buyer alternates between two sellers for price offers over a finite time horizon. The game ends when the buyer accepts a price offer or the selling season is over, whichever comes first. Previous research (Granot et al., 2007) shows that there are successive markdowns in equilibrium when the buyer is commonly known to be myopic; our analysis suggests that when she is known to be strategic price offers over the entire selli...
Published on Jan 1, 2011in Journal of Applied Psychology5.07
William J. Becker9
Estimated H-index: 9
(TCU: Texas Christian University),
Russell Cropanzano55
Estimated H-index: 55
(UA: University of Arizona)
Previous research pertaining to job performance and voluntary turnover has been guided by 2 distinct theoretical perspectives. First, the push―pull model proposes that there is a quadratic or curvilinear relationship existing between these 2 variables. Second, the unfolding model of turnover posits that turnover is a dynamic process and that a downward performance change may increase the likelihood of organizational separation. Drawing on decision theory, we propose and test an integrative frame...
Published on Jul 1, 2010in Journal of Economic Theory1.18
James Albrecht22
Estimated H-index: 22
(Georgetown University),
Axel Anderson6
Estimated H-index: 6
(Georgetown University),
Susan Vroman22
Estimated H-index: 22
(Georgetown University)
We consider the problem of sequential search when the decision to stop searching is made by a committee. We show that a symmetric stationary equilibrium exists and is unique given that the distribution of rewards is log concave. Committee members set a lower acceptance threshold than do single-agent searchers. In addition, mean preserving spreads in the distribution of rewards may lower each member's continuation value | an impossibility in the single-agent setting. If committee members are very...
Published on Sep 1, 2009in Journal of Economic Dynamics and Control1.50
Daniel Schunk18
Estimated H-index: 18
(UZH: University of Zurich)
This paper presents models for search behavior and provides experimental evidence that behavioral heterogeneity in search is linked to heterogeneity in individual preferences. Observed search behavior is more consistent with a new model that assumes dynamic updating of utility reference points than with models that are based on expected-utility maximization. Specifically, reference point updating and loss aversion play a role for more than a third of the population. The findings are of practical...
Published on Jun 28, 2007in Journal of Competition Law and Economics0.63
Christoph Engel52
Estimated H-index: 52
(MPG: Max Planck Society)
Oligopoly has been among the first topics in experimental economics. Over half a century, some 150 papers have been published. Each individual paper was interested in demonstrating one effect, but in order to do so, experimenters had to specify many more parameters. Thus they have generated a huge body of evidence, untapped so far. This meta-analysis makes this evidence available. More than 100 of the papers lend themselves to calculating an index of collusion. The database behind this paper cov...
J. Neil Bearden12
Estimated H-index: 12
(UA: University of Arizona),
Terence Connolly22
Estimated H-index: 22
(UA: University of Arizona)
This article describes empirical and theoretical results from two multi-attribute sequential search tasks. In both tasks, the DM sequentially encounters options described by two attributes and must pay to learn the values of the attributes. In the continuous version of the task the DM learns the precise numerical value of an attribute when she pays to view it. In the threshold version the DM learns only whether the value of an attribute is above or below a threshold that she sets herself. Result...
Published on Feb 21, 2007in Computational Management Science
Fouad Ben Abdelaziz1
Estimated H-index: 1
(College of Business Administration),
Saoussen Krichen8
Estimated H-index: 8
(Tunis University)
A review of the optimal stopping problem with more than a single decision maker (DM) is presented in this paper. We classify the existing literature according to the arrival of the offers, the utility of the DMs, the length of the sequence of offers, the nature of the game and the number of offers to be selected. We enumerate various definitions for this problem and describe some dynamic approaches.
Published on Sep 1, 2006in Management Science4.22
J. Neil Bearden12
Estimated H-index: 12
(UA: University of Arizona),
Amnon Rapoport48
Estimated H-index: 48
(HKUST: Hong Kong University of Science and Technology),
Ryan O. Murphy12
Estimated H-index: 12
(Columbia University)
We consider a class of sequential observation and selection decision problems in which applicants are interviewed one at a time, decision makers only learn the applicant's quality relative to the applicants that have been interviewed and rejected, only a single applicant is selected, and payoffs increase in the absolute quality of the selected applicant. Compared to the optimal decision policy, which we compute numerically, results from two experiments show that subjects terminated their search ...
Published on Oct 1, 2005in Journal of Mathematical Psychology3.02
J. Neil Bearden12
Estimated H-index: 12
(UA: University of Arizona),
Ryan O. Murphy12
Estimated H-index: 12
(UA: University of Arizona),
Amnon Rapoport48
Estimated H-index: 48
(UA: University of Arizona)
Abstract We present a generalization of a class of sequential search problems with ordinal ranks, referred to as “secretary” problems, in which applicants are characterized by multiple attributes. We then present a procedure for numerically computing the optimal search policy and test it in two experiments with incentive-compatible payoffs. With payoffs dependent on the absolute ranks of the attributes, we test the optimal search model with both symmetric (Experiment 1) and asymmetric (Experimen...
Cited By4
Newest
Published on May 5, 2019in Enterprise Information Systems2.12
Songling Tian1
Estimated H-index: 1
(TJU: Tianjin University),
Taiyong Wang1
Estimated H-index: 1
(TJU: Tianjin University)
+ 1 AuthorsXiaoqiang Wu (TJU: Tianjin University)
Published on Oct 30, 2017
Florence Dupin de Saint-Cyr9
Estimated H-index: 9
(University of Toulouse),
Romain Guillaume6
Estimated H-index: 6
(University of Toulouse)
We study the use of a bipolar decision structure called BLF (bipolar leveled framework) in the context of collective decision making where the vote consists in giving factual information about a candidate which the group should accept or reject. A BLF defines the set of possible decision principles that may be used in order to evaluate the admissibility of a given candidate. A decision principle is a rule that relates some observations about the candidate to a given goal that the selection of th...
Published on Oct 1, 2016in Tourism Management Perspectives
Napaporn Rianthong2
Estimated H-index: 2
(SIIT: Sirindhorn International Institute of Technology),
Aussadavut Dumrongsiri4
Estimated H-index: 4
(SIIT: Sirindhorn International Institute of Technology),
Youji Kohda6
Estimated H-index: 6
(Japan Advanced Institute of Science and Technology)
Abstract A two-stage stochastic programming model to determine an optimal sequencing of hotels, with the online review selection provided by online travel agencies (OTAs), is developed. The multi-attributes of hotels and online reviews containing various indicators (e.g., location and service) are all incorporated in a booking decision. To determine the optimal stopping search step for customers, a sequential search behavior is assumed. The objective of model is to minimize the expected number o...
Published on Jul 3, 2015in Games
Ernan Haruvy28
Estimated H-index: 28
(UTD: University of Texas at Dallas),
Peter T. L. Popkowski Leszczyc20
Estimated H-index: 20
(U of A: University of Alberta)
We consider auctions with price externality where all bidders derive utility from the winning price, such as charity auctions. In addition to the benefit to the winning bidder, all bidders obtain a benefit that is increasing in the winning price. Theory makes two predictions in such settings: First, individual bids will be increasing in the multiplier on the winning price. Second, individual bids will not depend on the number of other bidders. Empirically, we find no evidence that increasing the...
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