Contiguous Search: Exploration and Ambition on Uncharted Terrain

Can Urgun, Leeat Yariv

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

We provide a framework for analyzing search across correlated samples. The agent—a mineral prospecting team, a drug company, a politician—tracks observations over a Brownian path. The agent chooses the search speed and retrospectively picks the best observation when deciding to complete the search. We show that the optimal search speed is U-shaped: it is highest when approaching a breakthrough or when nearing search termination. Unlike search across independent samples, search optimally stops when observations are sufficiently discouraging, following a drawdown stopping boundary. We also show the tractability and features of optimal search contracts in our setting.

Original languageEnglish (US)
Pages (from-to)522-567
Number of pages46
JournalJournal of Political Economy
Volume133
Issue number2
DOIs
StatePublished - Feb 2025

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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