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Pandora’s rules in the laboratory
Published online by Cambridge University Press: 14 March 2025
Abstract
In theory, search conditions are a key determinant of Pandora’s rule (i.e. of the optimal search pattern), and of the eventual payoffs (Weitzman, 1979; Doval, 2018). We compare different search conditions in the laboratory and find strong evidence that they affect subjects’ order of inspection and payoffs greatly. Subjects are more conservative at the beginning of the search, and earn less if they are constrained to choose only among the inspected alternatives, than if they are not. These findings reinforce the empirical pertinence of the formal search literature, and generate novel insights regarding relevant settings of applied interest (e.g. the impact of market digitization on consumer behavior).
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- Copyright © The Author(s), under exclusive licence to Economic Science Association 2022.
Footnotes
Supplementary Information The online version contains supplementary material available at https://doi.org/10.1007/s10683-022-09770-x.
We thank Laura Doval, Philippos Louis, two anonymous reviewers and the editor, John Duffy, for their valuable feedback and advice. This project has received funding from the University of Cyprus (Dimitrios Xefteris) under the IMVASY research grant. The replication material for the study is available at https://doi.org/10.7910/DVN/RE8SJN.