Asymmetric Sequential Search Under Incomplete Information

19 Pages Posted: 12 May 2015

See all articles by Yizhaq Minchuk

Yizhaq Minchuk

Shamoon College of Engineering

Aner Sela

Ben-Gurion University of the Negev - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: May 2015

Abstract

We study a two-stage sequential search model with two agents who compete for one job. The agents arrive sequentially, each one in a different stage. The agents' abilities are private information and they are derived from heterogeneous distribution functions. In each stage the designer chooses an ability threshold. If an agent has a higher ability than the ability threshold in the stage in which he arrives, he gets the job and the search is over. We analyze the equilibrium ability thresholds imposed by the designer who wishes to maximize the ability of the agent who gets the job minus the search cost. We also investigate the ratio of the equilibrium ability thresholds as well as the optimal allocation of agents in both stages according to the agents' distributions of abilities.

Keywords: asymmetric information, sequential search

JEL Classification: D11, D82

Suggested Citation

Minchuk, Yizhaq and Sela, Aner, Asymmetric Sequential Search Under Incomplete Information (May 2015). CEPR Discussion Paper No. DP10579, Available at SSRN: https://ssrn.com/abstract=2605014

Yizhaq Minchuk (Contact Author)

Shamoon College of Engineering ( email )

Basel street
Beer-Sheva, 84100
Israel

Aner Sela

Ben-Gurion University of the Negev - Department of Economics ( email )

Beer-Sheva 84105
Israel
+972 8 647 2309 (Phone)
+972 8 647 2941 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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