IZA DP No. 7933: An Experimental Test of a Search Model under Ambiguity
published in: Theory and Decision, 2015, 79, 627-637
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.