Multi‐dimensional search: choosing the right path

This article seeks to analyse processes of decision‐making where multiple costly observations can be made about individual decision outcomes. It presents a simple model of a decision in which information is collected sequentially. Most economic models of sequential collection of costly information have focused on price‐search. It is argued that this is a very specialized type of search. This has led such models to focus on the issue of when search should stop. The article attempts to show how the principles of sequential search can be applied to other types of problems, such as innovation, where the choice of path is also of central concern.