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STICERD Economic Theory Seminars

When to decide: Timing of choice in Parallel Search

Pietro Ortoleva (Princeton University), joint with Can Urgun

Thursday 21 March 2024 15:30 - 17:00

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Unless otherwise specified, in-person seminars are open to the public.

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About this event

A decision-maker needs to choose one of two alternatives. They have priors about the quality of each and receive signals in continuous time. They need to decide when to stop acquiring information and make a choice, accounting for a cost that depends on the time spent. When should they stop gathering information and make a choice? This is one of the most classic problems in decision-making, yet the solution is unknown outside of very special cases. This paper fully characterizes the optimal stopping rule and provides the functional form of the stopping boundary for the typical case in which priors and signals are Normally distributed, and the cost is linear, convex, or mildly concave, with the additional assumption that there is an upper bound to the choice time (which can be arbitrary).

Economic Theory Seminars are held on Thursdays in term time at 15:30-17:00, both ONLINE and IN PERSON in SAL 3.05.

Seminar organisers: Dr Andrew Ellis and Dr Christopher Sandmann.

For further information please contact Sadia Ali: s.ali43@lse.ac.uk.

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