This paper studies a search problem in which a consumer is initially aware of only a few products. At every point in time, the consumer then decides between searching among alternatives of which he is already aware and discovering more products. I show that the optimal policy for this search and discovery problem is fully characterized by tractable reservation values. Moreover, I prove that a predetermined index fully specifies the purchase decision of a consumer following the optimal search policy. Finally, a comparison highlights differences to classical random and directed search. This paper was accepted by Dmitri Kuksov, marketing.

This paper investigates time variation in the dynamics of international portfolio equity flows. We extend the empirical model of Hau and Rey (2004) by embedding a two-state Markov regime-switching model into the structural VAR. The model is estimated using monthly data, 1995-2015, on equity returns, exchange rate returns and equity flows between the United States and advanced and emerging economies. We find that the data are consistent with portfolio rebalancing. The estimated states match periods of low and high financial stress. Our main result is that for equity flows between the United States and emerging markets, the rebalancing dynamics differ between episodes of high and low levels of financial stress. A switch from the low to the high-stress regime is associated with capital outflows from emerging markets. Once in the high stress regime, the response of capital flows to exchange rate shocks is smaller than in normal (low stress) periods.

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Most online retailers, search intermediaries, and platforms present products on product lists. By changing the ordering of products on these lists (the "ranking"), these online outlets can aim to improve consumer welfare or increase revenues. This paper studies to what degree these objectives differ from each other. First, I show that rankings can increase both revenues and consumer welfare by increasing the overall purchase probability through heterogeneous position effects. Second, I provide empirical evidence for this heterogeneity and quantify revenue and consumer welfare effects across different rankings. For the latter, I develop an estimation procedure for the search and discovery model of Greminger (2022) that yields a smooth likelihood function by construction. Comparing different counterfactual rankings shows that rankings targeting revenues often also increase consumer welfare. Moreover, these revenue-based rankings reduce consumer welfare only to a limited extent relative to a consumer-welfare-maximizing ranking.

This paper introduces a search problem where a consumer has to first become aware of an alternative, before being able to search it. Initially, the consumer is aware of only a few alternatives. During search, the consumer sequentially decides between searching alternatives he is already aware of and expanding awareness to discover more products.I show that the optimal policy for this search problem is fully characterized by simple reservation values. Moreover, I prove that the purchase outcome of a consumer optimally solving the search problem is equivalent to the consumer simply choosing the product offering the largest value on a predetermined index.