Behaviorally consistent optimal stopping rules

Edi Karni*, Zvi Safra

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This paper characterizes optimal stopping rules in a bounded sequential search model without recall for searchers whose preferences are nonlinear in the probabilities. The optimal search strategy may be dynamically inconsistent. However, if the searcher is behaviorally consistent, i.e., if he restricts his choice to strategies that consist of an optimal move at every stage provided that the same rule is followed in every subsequent stage then (a) if the preferences are quasiconvex then the optimal stopping rule has the familiar reservation level property, (b) if the preferences are quasiconcave then the optimal procedure may be a mixed strategy.

Original languageEnglish
Pages (from-to)391-402
Number of pages12
JournalJournal of Economic Theory
Issue number2
StatePublished - Aug 1990


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