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Econometric Society, Theoretical Economics, 1(6), p. 19-48, 2011

DOI: 10.3982/te592

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Search, Choice, and Revealed Preference

Journal article published in 1 by Andrew Caplin, Mark Dean
This paper is made freely available by the publisher.
This paper is made freely available by the publisher.

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Abstract

With complete information, choice of one option over another conveys preference. Yet when search is incomplete, this is not necessarily the case. It may instead reflect unawareness that a superior alternative was available. To separate these phenomena, we consider non-standard data on the evolution of provisional choices with contemplation time. We characterize precisely when the resulting data could have been generated by a general form of sequential search. We characterize also search that terminates based on a reservation utility stopping rule. We outline an experimental design that captures provisional choices in the pre-decision period.