Learning while Searching

Christian Krestel

2018-03-15 - This paper provides a model for analyzing the search behavior of agents that are initially uncertain about their own prospects and that look for a partner in a matching model. Positive experiences (many past offers) lead the agents to act more selectively in the market, and the incentives for selective behavior are determined in a stationary equilibrium of the entire search market. We establish conditions for the existence of equilibria with learning and we characterize features of optimal individual search behavior in such markets. We show that agents are optimally more selective in accepting offers than in proposing matches.