DP16341 Collective Progress: Dynamics of Exit Waves
|Author(s):||Doruk Cetemen, Can Urgun, Leeat Yariv|
|Publication Date:||July 2021|
|Keyword(s):||collective action, Exit Waves, Optimal stopping, Retrospective Search|
|JEL(s):||C73, D81, D83, O35|
|Programme Areas:||Industrial Organization, Organizational Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=16341|
We study a model of collective search by teams. Discoveries beget discoveries and correlated search results are governed by a Brownian path. Search results' variation at any point---the search scope---is jointly controlled. Agents individually choose when to cease search and implement their best discovery. We characterize equilibrium and optimal policies. Search scope is constant and independent of search outcomes as long as no member leaves. It declines after departures. A simple drawdown stopping boundary governs each agent's search termination. We show the emergence of endogenous exit waves, whereby possibly heterogeneous agents cease search all at once.