Campus Units

Economics

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

6-2008

Journal or Book Title

Journal of Economic Dynamics and Control

Volume

32

Issue

6

First Page or Article ID Number

1921

Last Page

1948

DOI

10.1016/j.jedc.2007.07.003

Abstract

This paper examines search with active learning and correlated information. We first develop a simple model to show how correlation affects the decision to acquire information. A unique data set on fishing site choice by mid-Atlantic clam fishermen is used to test the model predictions. Results find that clam fishermen search new sites when the catch at familiar sites declines, i.e., when the opportunity cost of gathering information is low, and also when catch at familiar sites is on the rise. Search following a catch decline occurs at spatially distant sites whereas search following a catch increase occurs at nearby sites. Correlated learning is crucial for explaining the site choice patterns in our data. These results provide new insights that may extend to a variety of economic search problems where correlated learning is important.

JEL Classification

D8, C4, Q2

Comments

This working paper was published in Journal of Economic Dynamics and Control 32 (2008): 1921–1948, doi:10.1016/j.jedc.2007.07.003. Posted with permission.

Copyright Owner

Elsevier B.V.

Language

en

File Format

application/pdf

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