Ulric B. and Evelyn L. Bray Social Sciences Seminar

Wednesday, March 10, 2021
12:00pm to 1:00pm
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Online Event
Random versus Directed Search for Scarce Resources
Teddy Mekonnen, Orlando Bravo Assistant Professor, Department of Economics, Brown University,

Abstract: This paper studies how different search protocols affect social welfare in a search market with scarcity. Agents search for objects that differ in quality either through a random or a directed search protocol. Random search protocol, in which agents are randomly paired to an object of any quality, gives rise to adversely selected markets. Directed search protocol, in which agents choose with which quality types to pair, gives rise to congestion. When utility is either non-transferable or transferable through Nash bargaining, I show that random search dominates directed search in terms of welfare, even though each agent would prefer to be able to direct her search.

Professor Mekonnen will be joined by guests Yeon-Koo Che and Nikhil Vellodi.

How to view the seminar:
Sign up for a free twitch.tv account, and tune in on Wednesdays at noon pacific time on twitch.tv/caltechecontheory. You will be able to ask questions on the twitch chat.

For more information, please contact Letty Diaz by email at letty.diaz@caltech.edu.