Breadth versus Depth
Abstract:
We consider a fundamental trade-off in search: when choosing between multiple unknown alternatives, is it better to learn a little about all of them (breadth) or a lot about a single one (depth)? In choice settings where a values are drawn from an exogenous distribution, we find that breadth is optimal for “small’‘ problems and that depth is optimal for “large’‘ ones. On the other hand, when distributions are endogenously chosen by firms, we find breadth to be always optimal. In a political setting where voters learn about candidates, we find a rational justification for a heretofore unexplained fact: voters tend to learn only about their preferred candidate. Finally, we consider extensions to fat-tails and correlation, and find that in these extensions, breadth is superior.

Please sign up for meetings using the below:
docs.google.com/spreadsheets/d/1eYzLT2DsbTivOvrVx3OGaE4alXvBO_ALCow3yV_fW8o/edit#gid=0
Date: 1 November 2018, 13:00 (Thursday, 4th week, Michaelmas 2018)
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Semianr Room C
Speaker: Michael Richter (Royal Holloway)
Organising department: Department of Economics
Part of: Department of Economics Seminar
Booking required?: Not required
Audience: Members of the University only
Editors: Erin Saunders, Melis Clark