A paradox of little pre-purchase search for durables: the trade-off between prices, product lifecycle, and savings on purchases
The paper describes the microeconomic trade-off between prices, savings on purchases, and the time horizon of the consumption-leisure choice during the search for different products. When marginal costs of the search are equal to its marginal benefit, the time of search is proportional to products’ lifecycles and it is inversely proportional to starting prices.
|Date of creation:||11 Mar 2012|
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- George J. Stigler, 1950.
"The Development of Utility Theory. II,"
Journal of Political Economy,
University of Chicago Press, vol. 58, pages 373.
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