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 language | English (US) |
|---|---|
| Pages (from-to) | 522-567 |
| Number of pages | 46 |
| Journal | Journal of Political Economy |
| Volume | 133 |
| Issue number | 2 |
| DOIs | |
| State | Published - Feb 2025 |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics