The Economics of Search

The economics of search is the study of the optimal strategy when choosing from a series of potential opportunities of random quality, given that delaying choice is costly. It is commonly applied to workers' searches for jobs and consumers' searches for products. In this volume, J. McCall (emeritus, economics, U. of California) and B. McCall (education and economics, U. of Michigan) aim to cover the entire field of search economics, including history, theory, and econometric applications. They open with an introduction, a review of important probabilistic techniques, a presentation of the history of sequential analysis, and discussion of the basic search model and its ramification throughout economics. They then present chapters on duration analysis as an econometric method for analyzing the sequential data of the basic search model, unemployment and unemployment insurance from a search perspective, job search in a dynamic economy, the implications of the introduction of a utility-based objective into the search problem, the theory of multi-armed bandits and its application to problems of optimal search, equilibrium models with price (wage) dispersion, and structural estimation methods. Concluding chapters review other important topics in search economics such as exchange, liquidity, economic growth, house selling, the natural state of unemployment, insurance, real options, the evolution of money, property rights, division of labor, and trust, and also discuss areas for further inquiry. Annotation c2008 Book News, Inc., Portland, OR (booknews.com)

John McCall is Professor Emeritus of Economics at the University of California Los Angeles and University of California Santa Barbara and Brian McCall is Professor of Education & Professor of Economics at the University of Michigan, USA.