Abstract
It is widely known that the feedback from a decision outcome may evoke emotions like regret, which results from a comparison between the gain the decision-maker has made and the gain he/she might make. Less is known about how search behavior is linked to feedback in a sequential search task such as searching for jobs, employees, prices, investments, disinvestments, or other items. What are the neural responses once subjects decide to stop searching and receive the feedback that they stopped too early or too late compared with the optimal stopping time? In an experimental setting of a search task, we found that the feedback-related negativity (FRN) induced by the feedback from stopping too late was more negative than stopping too early, suggesting that subjects might experience stronger regret when stopping too late. Subjects preferred to stop searching earlier if the last feedback was that they stopped too late, and vice versa, although they did not always benefit more from such adjustment. This might reflect general patterns of human learning behavior, which also manifests in many other decisions. Gender differences and risk attitudes were also considered in the study.
Highlights
IntroductionPrevious studies pay lots of attention to the search duration and reservation value of search behavior
Since people are often confronted with dynamic choice problems in their daily lives, search behavior has long been a topic of considerable interest in job searches (McCall, 1970; Burdett, 1978; Cox and Oaxaca, 1989; Le Barbanchon et al, 2021), information searches (Punj and Staelin, 1983; Brucks, 1985), and price searches to exercise an option or terminate an investment (Ihlanfeldt and Mayock, 2012; Yang et al, 2018).Previous studies pay lots of attention to the search duration and reservation value of search behavior
We found that female subjects tended to stop later than male subjects (10.61 ± 5.05 vs. 9.67 ± 5.29, Mann-Whitney test, p = 0.0046; Figure 3B), which was in line with the previous moderate the effect of feedback type on search duration through the interaction of feedback type and gender/risk attitude
Summary
Previous studies pay lots of attention to the search duration and reservation value of search behavior. Asano et al (2015) designed a laboratory experiment to explore the effect of ambiguity on subjects’ search behavior. The reservation value is the least favorable point at which one will accept to stop searching. They observed that subjects reduced their reservation points in the face of ambiguity over point distribution. In a real-time-search laboratory experiment, subjects’ reservation wages declined sharply over time. In the widely accepted labor market search models, the payoff-maximizing reservation wage was constant (Brown et al, 2011)
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