An Experimental Test of a Search Model Under Ambiguity
13 Pages Posted: 15 Feb 2014
This paper's objective is to design a laboratory experiment to explore the effect of ambiguity on a subject's search behavior in a finite-horizon sequential search model. In so doing, we employ a new approach to observe the potential trend of reservation points that is usually unobserved. We observe a significant dip in a trend of reservation points when subjects are faced with ambiguity over wage distributions.
Keywords: experiment, search model, ambiguity, reservation wage
JEL Classification: C91, D81
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