Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104232
Authors: 
Schunk, Daniel
Winter, Joachim
Year of Publication: 
2007
Series/Report no.: 
Munich Discussion Paper 2007-9
Abstract: 
Experimental studies of search behavior suggest that individuals stop searching earlier than predicted by the optimal, risk-neutral stopping rule. Such behavior could be generated by two different classes of decision rules: rules that are optimal conditional on utility functions departing from risk neutrality, or heuristics derived from limited cognitive processing capacities and satisfycing. To discriminate among these two possibilities, we conduct an experiment that consists of a standard search task as well as a lottery task designed to elicit utility functions. We find that search heuristics are not related to measures of risk aversion, but to measures of loss aversion.
Subjects: 
search
heuristics
utility function elicitation
risk attitudes
prospect theory
JEL: 
D83
C91
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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