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An Objective Measure of Search versus Experience Goods

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  • Laband, David N

Abstract

This paper proposes the use of product price as an empirically pliable measure of the expected benefits to consumers of acquiring information about product and vendor performance prior to purchase. As the purchase price of an item increases, so does the cost of making a disappointing purchase and, accordingly, the expected benefit from acquiring prepurchase information, ceteris paribus. A continuous price variable (a proxy for the cost of making a disappointing purchase) generates results similar to those obtained by P. Nelson for search versus experience goods, but can be applied to a broader range of goods and services. Copyright 1991 by Oxford University Press.

Suggested Citation

  • Laband, David N, 1991. "An Objective Measure of Search versus Experience Goods," Economic Inquiry, Western Economic Association International, vol. 29(3), pages 497-509, July.
    • Handle: RePEc:oup:ecinqu:v:29:y:1991:i:3:p:497-509
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    Citations

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    Cited by:

    1. Sinha, Piyush Kumar & Uniyal, Dwarika Prasad, 2016. "Impact of Store format on Shopping Involvement," IIMA Working Papers WP2016-06-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    2. Franklin G. Mixon & Chandini Sankaran & Kamal P. Upadhyaya, 2019. "Is Political Ideology Stable? Evidence from Long-Serving Members of the United States Congress," Economies, MDPI, vol. 7(2), pages 1-19, May.
    3. Maier, Erik & Dost, Florian, 2018. "Fluent contextual image backgrounds enhance mental imagery and evaluations of experience products," Journal of Retailing and Consumer Services, Elsevier, vol. 45(C), pages 207-220.
    4. Ana Alina Tudoran, 2022. "A machine learning approach to identifying decision-making styles for managing customer relationships," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(1), pages 351-374, March.
    5. Chang, Ting Fa Margherita & Droli, Maurizio & Iseppi, Luca, 2015. "Extra-Core Production and Capabilities: Where is the Food Industry Going?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(1), pages 1-21, February.
    6. David Paton, 1998. "Who A dvertises Prices? A Firm Level Study Based on Survey Data," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 5(1), pages 57-75.
    7. Sinha, Piyush Kumar & Uniyal, Dwarika Prasad, 2014. "Impact of Store format on Shopping Involvement," IIMA Working Papers WP2014-03-06, Indian Institute of Management Ahmedabad, Research and Publication Department.
    8. Ken Peattie, 2001. "Golden goose or wild goose? The hunt for the green consumer," Business Strategy and the Environment, Wiley Blackwell, vol. 10(4), pages 187-199, July.
    9. Robert B. Ekelund & Mark Thornton, 2019. "Extreme Credence and Imaginary Goods," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 47(3), pages 361-371, September.
    10. Uniyal, Dwarika Prasad & Sinha, Piyush Kumar, 2009. "Point of Purchase Communication: Role of Information Search, Store Benefit and Shopping Involvement," IIMA Working Papers WP2009-11-07, Indian Institute of Management Ahmedabad, Research and Publication Department.
    11. Michael Conyette, 2012. "A Framework Explaining How Consumers Plan And Book Travel Online," International Journal of Management and Marketing Research, The Institute for Business and Finance Research, vol. 5(3), pages 57-67.

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