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 .
This paper develops a search problem where a consumer initially is aware of only a few products. To find a good match , the consumer sequentially decides between searching among alternatives he is already aware of 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 .
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introduces
develops
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has to first become aware of an alternative, before being able to search it. Initially, the consumer
initially
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alternatives. During search
products. To find a good match
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among
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expanding awareness to discover
discovering
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and discovery
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simple
tractable
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the purchase outcome
a predetermined index fully specifies the purchase decision
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optimally solving the search problem is equivalent to the consumer simply choosing the product offering the largest value on a predetermined index
following the optimal search policy. Finally, a comparison highlights differences to classical random and directed search