Abstract
Berninghaus (1986) investigated the optimal policy in a job-search problem with ‘belated information’, where jobs contain nonpecuniary components that can be observed only after the job has been tested for one period. Berninghaus uses techniques of dynamic programming, specifically the Gittens index, to derive conditions under which a reservation-wage policy is optimal for this problem. We demonstrate that the Gittens index has a simple economic interpretation when the pecuniary and nonpecuniary returns are jointly normally distributed. The reservation-wage policy is optimal in this case if the returns are either positively correlated or weakly negatively correlated.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
