Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86707
Authors: 
Janssen, Maarten C.W.
Parakhonyak, Alexei
Year of Publication: 
2007
Series/Report no.: 
Tinbergen Institute Discussion Paper 08-002/1
Abstract: 
This paper builds a consumer search model where the cost of going back to stores already searched is explicitly taken into account. We show that the optimal search rule under costly recall is very different from the optimal search rule under perfect recall. Under costly recall, the optimal search behaviour is nonstationary and, moreover, the reservation price is not independent of previously sampled prices. We fully characterize the optimal search rule under costly recall when a finite number of firms draws price quotes from a given distribution.
Subjects: 
Search
Costly Recall
JEL: 
C61
D11
D83
Document Type: 
Working Paper

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