In:
Management Science, Institute for Operations Research and the Management Sciences (INFORMS), Vol. 52, No. 9 ( 2006-09), p. 1437-1449
Abstract:
We consider a class of sequential observation and selection decision problems in which applicants are interviewed one at a time, decision makers only learn the applicant's quality relative to the applicants that have been interviewed and rejected, only a single applicant is selected, and payoffs increase in the absolute quality of the selected applicant. Compared to the optimal decision policy, which we compute numerically, results from two experiments show that subjects terminated their search too early. We competitively test three behavioral decision rules and find that a multithreshold rule, which has the same form as the optimal decision policy but is parameterized differently, best accounts for the data. Results from a probability estimation task show that subjects tend to overestimate the absolute quality of early applicants and give insufficient consideration to the yet-to-be-seen applicants.
Type of Medium:
Online Resource
ISSN:
0025-1909
,
1526-5501
DOI:
10.1287/mnsc.1060.0535
Language:
English
Publisher:
Institute for Operations Research and the Management Sciences (INFORMS)
Publication Date:
2006
detail.hit.zdb_id:
206345-1
detail.hit.zdb_id:
2023019-9
SSG:
3,2
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