Endogenous emergence of searchable menus

Determine under what conditions a designer optimally chooses a searchable menu when agents may select any locally optimal option and the designer evaluates the resulting outcome according to a worst-case criterion.

Background

The paper treats searchability as an exogenously imposed constraint on screening mechanisms. The authors propose an alternative behavioral formulation in which agents may choose any locally optimal option from the menu and the designer evaluates outcomes using a worst-case criterion. The unresolved problem is to characterize the conditions under which optimal design endogenously generates a searchable menu rather than requiring searchability to be imposed as a constraint.