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Experience premium in consumer search: evidence from drivers’ refueling behavior

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  • Satoshi Imahie

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

Why do uninformed consumers pay more? A long-standing answer is market unfamiliarity. Yet how much it contributes to information frictions, and whether it fades with experience, have not been directly measured. I answer these questions using millions of fuel purchases by Japanese drivers. Identification exploits two kinds of variation in familiarity, from travel and relocation. Comparing the same driver across markets, I find that unfamiliarity accounts for 62% of the price gap between informed and uninformed consumers, while persistent individual differences explain the rest. This unfamiliarity-driven gap (the experience premium) declines with repeated purchases, consistent with learning in consumer search.

Suggested Citation

  • Satoshi Imahie, 2026. "Experience premium in consumer search: evidence from drivers’ refueling behavior," Working Papers hal-05668850, HAL.
    • Handle: RePEc:hal:wpaper:hal-05668850
    Note: View the original document on HAL open archive server: https://hal.science/hal-05668850v1
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