IDEAS home Printed from https://ideas.repec.org/p/kob/dpaper/dp2026-22.html

Experience Premium in Consumer Search: Evidence from Drivers’Refueling Behavior

Author

Listed:
  • SatoshiImahie

    (Toulouse School of Economics, FRANCE and Junior Research Fellow, Research Institute for Economics and Business Administration, Kobe University, JAPAN)

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

  • SatoshiImahie, 2026. "Experience Premium in Consumer Search: Evidence from Drivers’Refueling Behavior," Discussion Paper Series DP2026-22, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2026-22
    as

    Download full text from publisher

    File URL: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2026-22.pdf
    File Function: First version, 2026
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rothschild, Michael, 1974. "Searching for the Lowest Price When the Distribution of Prices Is Unknown," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 689-711, July/Aug..
    2. Matthew S. Lewis & Howard P. Marvel, 2011. "When Do Consumers Search?," Journal of Industrial Economics, Wiley Blackwell, vol. 59(3), pages 457-483, September.
    3. Xiaosong Wu & Matthew S. Lewis & Frank A. Wolak, 2024. "Search with learning in the retail gasoline market," RAND Journal of Economics, RAND Corporation, vol. 55(2), pages 292-323, June.
    4. Ying Fan & Ziying Fan & Yiyi Zhou, 2025. "Dynamic Search in a Non-Stationary Search Environment: An Application to the Beijing Housing Market," NBER Working Papers 33528, National Bureau of Economic Research, Inc.
    5. Jonah B. Gelbach, 2016. "When Do Covariates Matter? And Which Ones, and How Much?," Journal of Labor Economics, University of Chicago Press, vol. 34(2), pages 509-543.
    6. Adrian Düll & Heiko Karle & Simon Martin & Heiner Schumacher, 2025. "Evaluating Search Cost Models: Estimation and Prediction," CESifo Working Paper Series 12221, CESifo.
    7. Brian T. Ratchford & Narasimhan Srinivasan, 1993. "An Empirical Investigation of Returns to Search," Marketing Science, INFORMS, vol. 12(1), pages 73-87.
    8. David P. Byrne & Nicolas de Roos, 2017. "Consumer Search in Retail Gasoline Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 65(1), pages 183-193, March.
    9. Matthijs R. Wildenbeest, 2011. "An empirical model of search with vertically differentiated products," RAND Journal of Economics, RAND Corporation, vol. 42(4), pages 729-757, December.
    10. Matthew Lewis, 2008. "Price Dispersion And Competition With Differentiated Sellers," Journal of Industrial Economics, Wiley Blackwell, vol. 56(3), pages 654-678, September.
    11. Jackson Dorsey & Ashley Langer & Shaun McRae, 2025. "Fueling Alternatives: Gas Station Choice and the Implications for Electric Charging," American Economic Journal: Economic Policy, American Economic Association, vol. 17(1), pages 362-400, February.
    12. Friberg, Richard & Halseth, Emil M. S. & Steen, Frode & Ulsaker, Simen A., 2025. "Do Informed Consumers Pay Less? Evidence from a Survey with Linked Grocery Purchase Data," Discussion Paper Series in Economics 15/2025, Norwegian School of Economics, Department of Economics.
    13. Knittel, Christopher R. & Tanaka, Shinsuke, 2021. "Fuel economy and the price of gasoline: Evidence from fueling-level micro data," Journal of Public Economics, Elsevier, vol. 202(C).
    14. Matsumoto, Brett & Spence, Forrest, 2016. "Price beliefs and experience: Do consumers’ beliefs converge to empirical distributions with repeated purchases?," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 243-254.
    15. Fan, Ying & Fan, Ziying & Zhou, Yiyi, 2025. "Dynamic Search in a Non-Stationary Search Environment: An Application to the Beijing Housing Market," CEPR Discussion Papers 19957, Centre for Economic Policy Research.
    16. Parakhonyak, Alexei & Rhodes, Andrew, 2024. "Dynamic Consumer Search," TSE Working Papers 24-1606, Toulouse School of Economics (TSE).
    17. Goldman, Arieh & Johansson, J K, 1978. "Determinants of Search for Lower Prices: An Empirical Assessment of the Economics of Information Theory," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 5(3), pages 176-186, December.
    18. repec:oxf:wpaper:1066 is not listed on IDEAS
    19. Michael R. Baye & John Morgan & Patrick Scholten, 2006. "Information, Search, and Price Dispersion," Working Papers 2006-11, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    20. Raluca Mihaela Ursu & Tülin Erdem & Qingliang Wang & Qianyun Zhang, 2024. "Prior Information and Consumer Search: Evidence from Eye Tracking," Management Science, INFORMS, vol. 70(12), pages 8685-8708, December.
    21. Benabou Roland, 1993. "Search Market Equilibrium, Bilateral Heterogeneity, and Repeat Purchases," Journal of Economic Theory, Elsevier, vol. 60(1), pages 140-158, June.
    22. Fischer, Kai & Martin, Simon & Schmidt-Dengler, Philipp, 2024. "Indirect taxation in consumer search markets: The case of retail fuel," CEPR Discussion Papers 19095, Centre for Economic Policy Research.
    23. Simon Martin, 2024. "Market transparency and consumer search—Evidence from the German retail gasoline market," RAND Journal of Economics, RAND Corporation, vol. 55(4), pages 573-602, December.
    24. Stephan Seiler & Fabio Pinna, 2017. "Estimating Search Benefits from Path-Tracking Data: Measurement and Determinants," Marketing Science, INFORMS, vol. 36(4), pages 565-589, July.
    25. Sun, Liyang & Abraham, Sarah, 2021. "Estimating dynamic treatment effects in event studies with heterogeneous treatment effects," Journal of Econometrics, Elsevier, vol. 225(2), pages 175-199.
    26. Daniel A. Ackerberg, 2003. "Advertising, learning, and consumer choice in experience good markets: an empirical examination," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(3), pages 1007-1040, August.
    27. Ambarish Chandra & Mariano Tappata, 2011. "Consumer search and dynamic price dispersion: an application to gasoline markets," RAND Journal of Economics, RAND Corporation, vol. 42(4), pages 681-704, December.
    28. Tanaka, Shinsuke, 2020. "When tax incentives drive illicit behavior: The manipulation of fuel economy in the automobile industry," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    29. Michael Rothschild, 1974. "Searching for the Lowest Price When the Distribution of Prices Is Unknown: A Summary," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 3, number 1, pages 293-294, National Bureau of Economic Research, Inc.
    30. Han Hong & Matthew Shum, 2006. "Using price distributions to estimate search costs," RAND Journal of Economics, RAND Corporation, vol. 37(2), pages 257-275, June.
    31. Charles Hodgson & Gregory Lewis, 2023. "You Can Lead a Horse to Water: Spatial Learning and Path Dependence in Consumer Search," NBER Working Papers 31697, National Bureau of Economic Research, Inc.
    32. Alan T. Sorensen, 2000. "Equilibrium Price Dispersion in Retail Markets for Prescription Drugs," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 833-862, August.
    33. Dieter Pennerstorfer & Philipp Schmidt‐Dengler & Nicolas Schutz & Christoph Weiss & Biliana Yontcheva, 2020. "Information And Price Dispersion: Theory And Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 871-899, May.
    34. John McMillan & Peter B. Morgan, 1988. "Price Dispersion, Price Flexibility, and Repeated Purchasing," Canadian Journal of Economics, Canadian Economics Association, vol. 21(4), pages 883-902, November.
    35. David P. Byrne & Nicolas de Roos, 2022. "Start-up Search Costs," American Economic Journal: Microeconomics, American Economic Association, vol. 14(2), pages 81-112, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Imahie, Satoshi, 2026. "Experience Premium in Consumer Search: Evidence from Drivers’ Refueling Behavior," TSE Working Papers 26-1757, Toulouse School of Economics (TSE).
    2. Xiaosong Wu & Matthew S. Lewis & Frank A. Wolak, 2024. "Search with learning in the retail gasoline market," RAND Journal of Economics, RAND Corporation, vol. 55(2), pages 292-323, June.
    3. Rauh, Michael T., 2009. "Strategic complementarities and search market equilibrium," Games and Economic Behavior, Elsevier, vol. 66(2), pages 959-978, July.
    4. Klaus Gugler & Sven Heim & Mario Liebensteiner, 2016. "Non-Sequential Search, Competition and Price Dispersion in Retail Electricity," Department of Economics Working Papers wuwp225, Vienna University of Economics and Business, Department of Economics.
    5. Gugler, Klaus & Heim, Sven & Janssen, Maarten C. W. & Liebensteiner, Mario, 2018. "Market liberalization: Price dispersion, price discrimination and consumer search in the German electricity markets," ZEW Discussion Papers 18-042, ZEW - Leibniz Centre for European Economic Research.
    6. Xing Zhang & Tat Y. Chan & Ying Xie, 2018. "Price Search and Periodic Price Discounts," Management Science, INFORMS, vol. 64(2), pages 495-510, February.
    7. Avi Weiss & Joshua Sherman, 2014. "An Empirical Analysis of Search Costs and Price Dispersion," Working Papers 2014-06, Bar-Ilan University, Department of Economics.
    8. Jens‐Peter Loy & Dieter Pennerstorfer & Daniela Rroshi & Christoph Weiss & Biliana Yontcheva, 2022. "Consumer Information and Price Transmission: Empirical Evidence," Journal of Industrial Economics, Wiley Blackwell, vol. 70(3), pages 631-683, September.
    9. Xu, Jiayi & Zhang, Xiao-Bing & Liu, Yang, 2024. "Asymmetric search behavior for gasoline prices: Evidence from the Chinese gasoline market," International Review of Economics & Finance, Elsevier, vol. 89(PB), pages 699-712.
    10. Raluca M. Ursu & Qingliang Wang & Pradeep K. Chintagunta, 2020. "Search Duration," Marketing Science, INFORMS, vol. 39(5), pages 849-871, September.
    11. Noel, Michael D. & Qiang, Hongjie, 2019. "The role of information in retail gasoline price dispersion," Energy Economics, Elsevier, vol. 80(C), pages 173-187.
    12. Taehwan Kim, 2018. "Price Competition and Market Segmentation in Retail Gasoline: New Evidence from South Korea," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 53(3), pages 507-534, November.
    13. Xulia González & Daniel Miles-Touya, 2018. "Price dispersion, chain heterogeneity, and search in online grocery markets," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 9(1), pages 115-139, March.
    14. Hakan Yilmazkuday, 2017. "Geographical dispersion of consumer search behaviour," Applied Economics, Taylor & Francis Journals, vol. 49(57), pages 5740-5752, December.
    15. Jeisson Cárdenas & Jesús Otero & Luis H. Gutiérrez, 2022. "Search intensity, search time and prices: evidence from retail diesel markets in France," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(6), pages 4797-4807, December.
    16. Sandro Shelegia & Chris M. Wilson, 2021. "A Generalized Model of Advertised Sales," American Economic Journal: Microeconomics, American Economic Association, vol. 13(1), pages 195-223, February.
    17. Elisabeth Honka & Pradeep Chintagunta, 2017. "Simultaneous or Sequential? Search Strategies in the U.S. Auto Insurance Industry," Marketing Science, INFORMS, vol. 36(1), pages 21-42, January.
    18. Maarten Janssen & Paul Pichler & Simon Weidenholzer, 2009. "Sequential Search with Incompletely Informed Consumers: Theory and Evidence from Retail Gasoline Markets," Vienna Economics Papers 0914, University of Vienna, Department of Economics.
    19. Dieter Pennerstorfer & Philipp Schmidt‐Dengler & Nicolas Schutz & Christoph Weiss & Biliana Yontcheva, 2020. "Information And Price Dispersion: Theory And Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 871-899, May.
    20. Vladimir Yankov, 2024. "In Search of a Risk‐Free Asset: Search Costs and Sticky Deposit Rates," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 56(5), pages 1053-1098, August.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kob:dpaper:dp2026-22. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Office of Promoting Research Collaboration, Research Institute for Economics & Business Administration, Kobe University (email available below). General contact details of provider: https://edirc.repec.org/data/rikobjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.