Calendrier du 28 janvier 2019
Roy Seminar (ADRES)
Du 28/01/2019 de 17:00 à 18:30
Salle R1-09, Campus Jourdan, 48 boulevard Jourdan, 75014 Paris
AUSTEN-SMITH David (Northewestern University)
Optimal exploration
écrit avec César Martinelli
Consider a decision maker who has to choose one of several alternatives, and who is imperfectly informed about the payoff of each of them. In each period, the decision maker has to decide whether to stop and take one of the alternatives, or to continue researching the alternatives. New information is costly and is never conclusive. We provide a dynamic programming formulation of the decision maker’s problem with either a finite deadline or no deadline, and give necessary and sufficient conditions for research to take place for some prior beliefs about the alternatives. We show that, at least for short deadlines and situations in which there is a strictly positive probability the decision maker stops searching in the next period under the optimal plan, the decision maker either explores the best alternative and stops after good news, or explores the second best alternative and stops after bad news, with the former path being optimal if the decision maker is relatively optimistic about the payoff of the alternatives. On the other hand, an example shows that searching the third best alternative can be optimal when there are more than three remaining search periods and there is no likelihood of stopping in the next period.
GSIELM (Graduate Students International Economics and Labor Market) Lunch Seminar
Du 28/01/2019 de 13:00 à 14:00
ALVAREZ Bastien (CEPS, ENS)
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