Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Sep, 1985, Volume 53, Issue 5

Distributions of the Duration and Value of Job Search with Learning<1199:DOTDAV>2.0.CO;2-D
p. 1199-1232

Peter B. Morgan

Expected value maximizing sequential search rules can be expressed in terms of reservation values. In search with learning the reservation value at any stage of the search is unknown until that stage is reached. Thus calculating ex ante (and subsequent) probabilities of search duration and the offer accepted is difficult if these probabilities are expressed in terms of reservation values. This paper shows, for a wide class of learning procedures, how re-expressing these probabilities in terms of fixed points allows their direct calculation and, thereby, calculation of the expected value of adaptive search. Examples and comparative statics results are presented.

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