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Search and Consumer Theory

Author

Listed:
  • R. Manning
  • P. B. Morgan

Abstract

A consumer faces list prices for commodities, but can buy one at a discount. Discounts vary randomly between sellers. The number of quotations sought depends on list prices, search costs and wealth. This function is homogeneous of degree zero, and, provided some sufficient conditions are satisfied, is; increasing in wealth; decreasing in search cost; independent of the list price of the discounted commodity if indirect utility is multiplicatively separable; increasing in the list price if the commodity is a necessity; increasing in the list price of substitutes. Slutsky's equation is generalized to include search.

Suggested Citation

  • R. Manning & P. B. Morgan, 1982. "Search and Consumer Theory," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(2), pages 203-216.
    • Handle: RePEc:oup:restud:v:49:y:1982:i:2:p:203-216.
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    File URL: http://hdl.handle.net/10.2307/2297270
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    Citations

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    Cited by:

    1. Manning, Richard & Manning, Julian R. A., 1997. "Budget-constrained search," European Economic Review, Elsevier, vol. 41(9), pages 1817-1834, December.
    2. Nirvikar Singh, 2011. "Market Institutions: An Expository Essay," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 3(1 (March)), pages 34-51.
    3. repec:hal:spmain:info:hdl:2441/jeo70lroq9p9bmeio80mpgg5h is not listed on IDEAS
    4. Zakaria Babutsidze, 2017. "Duopolistic Price Competition with Captives," Metroeconomica, Wiley Blackwell, vol. 68(4), pages 903-926, November.
    5. DeSarbo, Wayne S. & Choi, Jungwhan, 1998. "A latent structure double hurdle regression model for exploring heterogeneity in consumer search patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 423-455, November.
    6. Fershtman, Chaim & Fishman, Arthur, 1989. "Cycles and Non-Stationary Equilibrium Search," Foerder Institute for Economic Research Working Papers 275474, Tel-Aviv University > Foerder Institute for Economic Research.
    7. Levy, David M. & Makowsky, Michael D., 2010. "Price dispersion and increasing returns to scale," Journal of Economic Behavior & Organization, Elsevier, vol. 73(3), pages 406-417, March.
    8. Dutta, Champa Bati & Das, Debasish Kumar, 2017. "What drives consumers' online information search behavior? Evidence from England," Journal of Retailing and Consumer Services, Elsevier, vol. 35(C), pages 36-45.
    9. Jason R. Blevins & Garrett T. Senney, 2019. "Dynamic selection and distributional bounds on search costs in dynamic unit‐demand models," Quantitative Economics, Econometric Society, vol. 10(3), pages 891-929, July.
    10. Grosfeld-Nir, Abraham & Sarne, David & Spiegler, Israel, 2009. "Modeling the search for the least costly opportunity," European Journal of Operational Research, Elsevier, vol. 197(2), pages 667-674, September.
    11. Babur De los Santos & Ali Hortacsu & Matthijs R. Wildenbeest, 2009. "Testing Models of Consumer Search Using Data on Web Browsing Behavior," Working Papers 09-23, NET Institute, revised Aug 2009.
    12. Babur De Los Santos & Ali Hortacsu & Matthijs R. Wildenbeest, 2012. "Testing Models of Consumer Search Using Data on Web Browsing and Purchasing Behavior," American Economic Review, American Economic Association, vol. 102(6), pages 2955-2980, October.
    13. Singh, Nirvikar, 2010. "Transaction, Search and Switching Costs: An Expository Essay," MPRA Paper 21558, University Library of Munich, Germany.
    14. Burdett, Kenneth, 1989. "Search Market Models: A Survey," Working Paper Series 234, Research Institute of Industrial Economics.
    15. Daniel Leonard, 1990. "Richard Manning 1943–1989," The Economic Record, The Economic Society of Australia, vol. 66(2), pages 171-174, June.

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