Competition in Optimal Stopping: Behavioral Insights

Ignacio Rios, Pramit Ghosh
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Abstract

Problem definition: We study settings where agents sequentially search among different options under competition. Motivated by labor markets and the allocation of kidneys from deceased donors, we focus on the effect of (i) the mechanism to collect decisions, that is, whether all agents make their decisions simultaneously or sequentially, and (ii) competition, that is, the number of agents who are searching from a shared pool of options. Methodology/results: We introduce a model of sequential search under competition, in which agents are exogenously prioritized and must decide when to stop their search to maximize the chosen option’s value. We characterize the optimal policy, which defines a sequence of thresholds that dictates when each agent should accept an option based on their priority relative to others still searching and the number of remaining options. Our analysis reveals that neither the mechanism for collecting agents’ decisions nor the number of lower-priority agents influences the optimal policy. To test these predictions, we designed and conducted a laboratory experiment replicating our theoretical model. The results indicate significant deviations from the optimal policy. Moreover, we find that the mechanism significantly affects agents’ decisions due to primarily two drivers: (i) saliency of competition and (ii) frustration. Finally, we identify an “illusion of competition” effect, whereby agents use significantly lower thresholds when the number of agents with lower priority increases. Managerial implications: Our results show that a higher perception of competition and using a simultaneous mechanism (i.e., batch offering) significantly decrease the thresholds that agents use to guide their search, making them stop their search earlier. Thus, clearinghouses that suffer from inefficient discard of options should increase the saliency of competition and use batch offerings to reduce agents’ selectivity and mitigate waste.Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2022.0621 .
最优停车中的竞争行为洞察
问题定义:我们研究的是在竞争条件下,代理人在不同选择中顺序搜索的情况。受劳动力市场和已故捐赠者肾脏分配的启发,我们重点研究了以下两个因素的影响:(i) 收集决策的机制,即所有代理人是同时还是按顺序做出决策;(ii) 竞争,即从共享选项库中搜索的代理人数量。方法/结果:我们引入了一个竞争条件下的顺序搜索模型,在这个模型中,代理人的优先级是外生的,他们必须决定何时停止搜索,以最大化所选方案的价值。我们描述了最优策略的特征,它定义了一系列阈值,根据每个代理人相对于其他仍在搜索的代理人的优先级以及剩余选项的数量,决定每个代理人何时应该接受一个选项。我们的分析表明,收集代理决策的机制和低优先级代理的数量都不会影响最优策略。为了验证这些预测,我们设计并进行了一个实验室实验,复制了我们的理论模型。结果表明,实验结果明显偏离了最优政策。此外,我们还发现,该机制对代理人的决策产生重大影响的主要原因有两个:(i) 竞争的突出性和 (ii) 挫折感。最后,我们发现了一种 "竞争假象 "效应,即当优先级较低的代理人数量增加时,代理人使用的阈值会明显降低。管理意义:我们的研究结果表明,较高的竞争感知和使用同步机制(即批量发售)会显著降低代理人用于指导其搜索的阈值,使他们更早停止搜索。因此,存在低效放弃选项问题的信息交流中心应该提高竞争的显著性,并使用分批提供的方式来降低代理人的选择性,减少浪费:在线附录见 https://doi.org/10.1287/msom.2022.0621 。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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