SINGLE THRESHOLD SELECTION STRATEGY FN THE GROUP INTERVIEW PROBLEM

In many decision situations such as selling an asset on the open marke t, a decision maker receives a random sequence of offers. Following an evaluation of each offer, the decision maker must decide whether to t ake the current offer or reject it and consider the next one. One of t he simple selection strategies in the sequential decision problem is v ia an aspiration-level or a threshold value, which allows the decision maker to select the first offer that is higher than the pre-determine d threshold value. For the so-called group interview problem in which a number of offers or choices are presented sequentially in groups, we derive the optimal threshold value (1) to maximize the probability of selecting the best choice and (2) to maximize the expected value of t he selected choice. For the cases where the order of groups can be rea rranged for evaluation, an exact solution is derived for the optimal s equencing of groups. There are many potential applications of the sele ction strategy, including product pricing strategy and consumer search and purchase process.